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Globalization Institute Working Paper
On the Nexus of Monetary Policy and Financial Stability: Novel Asset Market Monitoring Tools for Building Economic Resilience and Mitigating Financial Risks
This paper argues that asset pricing bubbles are an important source of financial instabilities.
June 02, 2023
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Research Department Working Papers
Money Matters: Broad Divisia Money and the Recovery of Nominal GDP from the COVID-19 Recession
The rise of inflation in 2021 and 2022 surprised many macroeconomists who ignored the earlier surge in money growth because past instability in the demand for simple-sum monetary aggregates had made these aggregates unreliable indicators. This paper finds that the demand for more theoretically-based Divisia aggregates can be modeled and that their growth rates provide useful information for future nominal GDP growth.
May 25, 2023
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Texas’ cheap housing edge slipping away as resilient demand outpaces supply
Housing affordability has declined in Texas, a top destination for domestic and international migrants drawn by its historically low cost of living.
April 21, 2023
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Research Department Working Papers
State-Dependent Local Projections
Do state-dependent local projections asymptotically recover the population responses of macroeconomic aggregates to structural shocks? The answer to this question depends on how the state of the economy is determined and on the magnitude of the shocks.
April 19, 2023
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Interest rate volatility contributed to higher mortgage rates in 2022
The Federal Reserve aggressively tightened monetary policy in 2022, responding to high and persistent inflation. The resulting borrowing cost increase for households and firms was generally anticipated. However, fixed-rate mortgage interest rates were especially sensitive to the policy regime change.
April 04, 2023
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Calibrating central bank inflation messages is key to policy success
A well-crafted message about the current and future state of the economy can influence the private sector’s expectations and guide behavior to ensure that the economy remains strong and prices stable even amid threatening supply-and-demand shocks.
March 28, 2023
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Threat of global housing slide looms amid rising rates
While house-price growth has recently begun to moderate—or, in some countries, to decline—the risk of a deep global housing slide persists.
February 28, 2023
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Dallas Fed, Latin American central banks explore financial stability risks
The COVID-19 pandemic, recent monetary tightening and a strengthening U.S. dollar were the themes explored during a recent conference organized by the Federal Reserve Bank of Dallas and the Center for Latin American Monetary Studies (CEMLA) and held at CEMLA’s Mexico City headquarters.
February 16, 2023
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Research Department Working Papers
Financial Technology and the Transmission of Monetary Policy: The Role of Social Networks
This paper establishes that social networks play a key role in consumers’ adoption of FinTech lending, which amplifies the effects of a monetary stimulus.
February 14, 2023
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Job vacancy, unemployment relationship clouds ‘soft landing’ prospects
Some economists have argued that because the job vacancy rate has been well above its prepandemic level, there is plenty of room for vacancies to fall before the unemployment rate must rise.
February 07, 2023