Communicating Inflation Uncertainty and Household Expectations Staff Working Paper 2023-63 Olena Kostyshyna, Luba Petersen We examine the value of direct communication to households about inflation and the uncertainty around inflation statistics. All types of information about inflation are effective at immediately managing inflation expectations, with information about outlooks being more effective and relevant than that about recent inflation and Bank targets. Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Credibility, Inflation and prices, Inflation targets, Monetary policy and uncertainty, Monetary policy communications JEL Code(s): C, C9, C93, D, D8, D84, E, E5, E59, E7
Monetary Policy and Racial Inequality in Housing Markets: A Study of 140 US Metropolitan Areas Staff Working Paper 2023-62 Qi Li, Xu Zhang We find that minority households see greater declines in housing returns and entries into homeownership than White households after a tightening of monetary policy. Our findings emphasize the unintended consequences of monetary policy on racial inequality in the housing market. Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Housing, Monetary policy JEL Code(s): E, E4, E40, E5, E52, R, R0, R00
Predictive Density Combination Using a Tree-Based Synthesis Function Staff Working Paper 2023-61 Tony Chernis, Niko Hauzenberger, Florian Huber, Gary Koop, James Mitchell This paper studies non-parametric combinations of density forecasts. We introduce a regression tree-based approach that allows combination weights to vary on the features of the densities, time-trends or economic indicators. In two empirical applications, we show the benefits of this approach in terms of improved forecast accuracy and interpretability. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods JEL Code(s): C, C1, C11, C3, C32, C5, C53
Third-Country Effects of U.S. Immigration Policy Staff Working Paper 2023-60 Agostina Brinatti, Xing Guo We study how the tightening of US immigration policy affects the Canadian economy and American workers. After the reduction in H-1B visa admissions in 2017, more immigrants came to Canada, and Canadian firms expanded their employment, sales and exports. The close trade link between the United States and Canada dampens the benefit American workers derive from this policy change. Content Type(s): Staff research, Staff working papers Topic(s): International topics, Labour markets, Recent economic and financial developments, Trade integration JEL Code(s): F, F1, F16, F2, F22, J, J6, J61
Perceived versus Calibrated Income Risks in Heterogeneous-Agent Consumption Models Staff Working Paper 2023-59 Tao Wang Perceived income risks reported in a survey of consumer expectations are more heterogeneous and, on average, lower than indirectly calibrated risks based on panel data. They prove to be one explanation for why a large fraction of households hold very little liquid savings and why accumulated wealth is widely unequal across households. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary policy, Monetary policy and uncertainty JEL Code(s): D, D1, D14, E, E2, E21, E7, E71, G, G5, G51