Articles providing critical insights and analysis on monetary policy issues impacting the U.S. economy and its deep financial and economic relationship with Mexico.
Bubble thought: What beliefs can reveal about housing market risks
Survey-based forecast data on home price growth are a surer indicator of housing market exuberance than traditional valuation ratios, such as price-to-income or price-to-rent.
September 02, 2025
Middle East geopolitical risk modestly affects inflation and inflation expectations
In Depth: While hostilities between Iran and Israel ended quickly in June 2025 without a major oil supply disruption, it is worthwhile to explore the impact on inflation and inflation expectations if this geopolitical event had turned out differently.
August 21, 2025
Research Department Working Papers
Dollar Funding Fragility and Non-U.S. Global Banks
Global non-U.S. banks have significant dollar exposure both on and off their balance sheet. This paper develops a model to analyze their adjustment to dollar funding shocks, whether from reduced direct lending or external dollar shortages.
August 12, 2025
Research Department Working Papers
A History of U.S. Tariffs: Quantifying Strategic Trade-Offs in Tariff Policy Design
U.S. tariff policy has historically balanced competing goals—revenue, protection and reciprocity. Policy priorities have shifted over time in response to changing economic and political conditions. Using a calibrated general equilibrium model, this paper illustrates these trade-offs through the lens of tariff Laffer curves.
August 05, 2025
Research Department Working Papers
The Micro and Macro Dynamics of Capital Flows
This paper studies empirically and theoretically the effects of international financial flows on resource allocation.
August 01, 2025
China remains modest player in U.S.–Mexico trade despite growing scrutiny
Understanding Mexico’s evolving economic linkages with East Asia and China is critical to the future of the United States–Mexico–Canada Agreement (USMCA trade accord) and the nearshoring and integration of North American manufacturing supply chains.
July 09, 2025
Declining immigration weighs on GDP growth, with little impact on inflation
In Depth: Unauthorized immigration surged sharply in 2021–24 but has since declined abruptly with negative implications for economic growth.
July 08, 2025
Mexico Economic Update
Mexico’s economy shows mixed signals
The latest data available indicated a mixed economic outlook as employment and remittances fell, while output primarily driven by agriculture, industrial production, exports and retail sales grew.
June 20, 2025
Research Department Working Papers
Analysis of Multiple Long Run Relations in Panel Data Models with Applications to Financial Ratios
This paper provides a new methodology for the analysis of multiple long-run relations in panel data models where the cross-section dimension, n, is large relative to the time-series dimension, T.
June 05, 2025
Research Department Working Papers
Bubbling Up? What Consumer Expectations Reveal About U.S. Housing Market Exuberance
This paper investigates the presence of speculative bubbles in the U.S. housing market after the global financial crisis. Unlike standard approaches that rely on observed economic fundamentals, the method used in this paper leverages subjective price expectations from the University of Michigan Survey of Consumers to test for exuberance without imposing a specific model of intrinsic housing values.
May 21, 2025