Dallas Fed Economics
Is the U.S. ‘exorbitant privilege’ of favorable rates fading?
The United States has held what some in international financial markets have called “exorbitant privilege”—the dollar is a global reserve currency, widely accepted and conveying the privilege to borrow at a favorable rate. However, a decline in U.S. net income from foreign investments since 2024 has raised the question of whether the “privilege” will be sustained.
November 10, 2026
Working Paper
Maritime Chokepoint Disruptions, Trade and U.S. Inflation
This paper studies the effects of maritime chokepoint disruptions on U.S. inflation and their implications for monetary policy.
November 09, 2026
Working Paper
Shortages of Critical Goods in a Global Economy
This paper studies shortages of critical goods in an open economy with credit market frictions and the role of trade and industrial policy in mitigating them.
October 30, 2026
Dallas Fed Economics
What Big Macs tell us about the disconnect between prices and exchange rates
The Economist’s Big Mac Index is a measure of the real exchange rate that instead of measuring the price of a basket of goods and services, measures the price of one good, the McDonald’s Big Mac. Recent empirical work finds that financial factors, and not monetary ones, underlay a very high correlation between nominal exchange rates and the Big Mac-based real exchange rate.
October 15, 2026
Dallas Fed Economics
Refinery outages pumping up fuel prices more than cost of crude oil
Even after the Iran conflict ends and the flow of crude oil through the Strait of Hormuz normalizes, U.S. fuel prices will likely remain unusually elevated relative to crude prices, owing to diminished refining operations. As a result, headline inflation measures could remain above where oil price trends would normally indicate for as long as a significant portion of global refining capacity stays offline.
October 08, 2026
Working Paper
Human Capital Accumulation Across Space
This paper studies how human capital shapes the economic geography of development. The authors propose a model in which human capital acquisition costs vary across space, and regions with higher human capital invest more in human-capital-augmenting technology.
September 23, 2026
Working Paper
Globalization, Inflation Dynamics and the Slope of the Phillips Curve
This paper studies how international trade has affected U.S. inflation dynamics. The authors develop a multi-region New Keynesian model of an open monetary union in which regional Phillips curve slopes depend on exposure to imported goods.
September 22, 2026
Working Paper
Endogenous Markups and Trade Elasticities
This paper develops a search model of international trade where buyers allocate costly cognitive attention across suppliers.
September 21, 2026
Special Report
USMCA trade outlook matters for the U.S., not just for Canada and Mexico
While the overall impact on the U.S. of a redrawn regional trade agreement with Mexico and Canada appears modest in most plausible scenarios, policies promoting regionalization differ sharply in their impacts.
August 26, 2026
Dallas Fed Economics
Mitigating tariffs via USMCA may have limited 2025 price increases
Higher tariffs do not automatically show up one-for-one in consumer prices. Price effects depend on how firms respond. Foreign exporters may cut pre-tariff prices to preserve access to the U.S. market, while domestic importers or retailers may absorb part of the increase with lower margins.
August 18, 2026