Resurrecting the Role of Real Money Balance Effects Staff Working Paper 2009-24 José Dorich I present a structural econometric analysis supporting the hypothesis that money is still relevant for shaping inflation and output dynamics in the United States. In particular, I find that real money balance effects are quantitatively important, although smaller than they used to be in the early postwar period. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary aggregates, Monetary policy transmission JEL Code(s): E, E3, E31, E32, E5, E52
A Financial Conditions Index for the United States Staff Discussion Paper 2009-11 Kimberly Beaton, René Lalonde, Corinne Luu The financial crisis of 2007–09 has highlighted the importance of developments in financial conditions for real economic activity. The authors estimate the effect of current and past shocks to financial variables on U.S. GDP growth by constructing two growthbased financial conditions indexes (FCIs) that measure the contribution to quarterly (annualized) GDP growth from financial conditions. Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Monetary and financial indicators, Monetary conditions index, Recent economic and financial developments JEL Code(s): E, E3, E32, E4, E44, E47, E5, E51
The Outlook for the Global Supply of Oil: Running on Faith? Staff Discussion Paper 2009-9 Olivier Gervais, Ilan Kolet The dramatic reduction in global demand, and the decline in the spot price of crude oil in the second half of last year, may have significant implications for the future supply of oil. Investments in conventional methods of extraction have been constrained, since easily accessible oil reserves are typically concentrated in countries with geopolitical uncertainty and/or state-run oil companies. Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Inflation and prices, International topics JEL Code(s): Q, Q4, Q41, Q43
Information Flows and Aggregate Persistence Staff Working Paper 2009-11 Oleksiy Kryvtsov Models with imperfect information that generate persistent monetary nonneutrality predominantly rely on assumptions leading to substantial heterogeneity of information across price-setters. This paper develops a quantitative general equilibrium model in which the degree of heterogeneity of information is determined endogenously. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Inflation and prices, Monetary policy transmission JEL Code(s): D, D8, D83, E, E3, E31, E32
Inventories and Real Rigidities in New Keynesian Business Cycle Models Staff Working Paper 2009-9 Oleksiy Kryvtsov, Virgiliu Midrigan Kryvtsov and Midrigan (2008) study the behavior of inventories in an economy with menu costs, fixed ordering costs and the possibility of stock-outs. This paper extends their analysis to a richer setting that is capable of more closely accounting for the dynamics of the US business cycle. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary policy transmission JEL Code(s): E, E3, E31, F, F1, F12
Are Commodity Prices Useful Leading Indicators of Inflation? Staff Discussion Paper 2009-5 Calista Cheung Commodity prices have increased dramatically and persistently over the past several years, followed by a sharp reversal in recent months. These large and persistent movements in commodity prices raise questions about their implications for global inflation. The process of globalization has motivated much debate over whether global factors have become more important in driving the […] Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Economic models, Inflation and prices, International topics, Monetary policy transmission JEL Code(s): E, E3, E5, E52, E58
Inventories, Markups, and Real Rigidities in Menu Cost Models Staff Working Paper 2009-6 Oleksiy Kryvtsov, Virgiliu Midrigan Real rigidities that limit the responsiveness of real marginal cost to output are a key ingredient of sticky price models necessary to account for the dynamics of output and inflation. We argue here, in the spirit of Bils and Kahn (2000), that the behavior of marginal cost over the cycle is directly related to that of inventories, data on which is readily available. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary policy transmission JEL Code(s): E, E3, E31, F, F1, F12
On the Amplification Role of Collateral Constraints Staff Working Paper 2008-23 Caterina Mendicino Following the seminal contribution of Kiyotaki and Moore (1997), the role of collateral constraints for business cycle fluctuations has been highlighted by several authors and collateralized debt is becoming a popular feature of business cycle models. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates JEL Code(s): E, E2, E20, E3, E32
A Model of Housing Boom and Bust in a Small Open Economy Staff Working Paper 2008-9 Hajime Tomura This paper considers a dynamic stochastic general equilibrium model for a small open economy and finds that an improvement in the terms of trade causes a housing boom-bust cycle if the duration of the improvement is uncertain. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates JEL Code(s): E, E4, E44, F, F4, F41
Electronic Transactions as High-Frequency Indicators of Economic Activity Staff Working Paper 2007-58 John Galbraith, Greg Tkacz Since the advent of standard national accounts data over 60 years ago, economists have traditionally relied on monthly or quarterly data supplied by central statistical agencies for macroeconomic modelling and forecasting. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles JEL Code(s): E, E1, E17, E2, E27, E6, E66