Globalization Institute Working Paper
Flexible Average Inflation Targeting: How Much Is U.S. Monetary Policy Changing?
One major outcome of the Federal Reserve’s 2019–20 framework review was the adoption of a Flexible Average Inflation Targeting (FAIT) strategy in August 2020. Using synthetic control methods, this paper documents that U.S. inflation rose post-FAIT considerably more than predicted had the strategy not changed.
July 30, 2022
Fed’s 1994 rate aggressiveness led to emerging-market turmoil; is this time different?
As the Federal Reserve embarks on a monetary tightening cycle, only a few spots of vulnerability have appeared among emerging markets.
July 12, 2022
Monetary policy at a crossroads: Donald Kohn on controlling inflation, Ukraine effects, Volcker-era lessons
Former Fed Vice Chair Kohn discussed the challenges of reining in inflation and other topics in a policy panel during a recent meeting of the Society for Computational Economics at Southern Methodist University.
July 05, 2022
Fed liquidity facility successfully anchored commercial real estate amid pandemic
The Federal Reserve responded to the onset of the COVID-19 pandemic with several liquidity facilities to ensure a continuing flow of credit to households and businesses. The TALF, which financed highly rated asset-backed securities, proved especially important to supporting commercial real estate finance.
May 24, 2022
Russia’s war on Ukraine will leave scars on U.S., world economies
The conflict may alter the global economic and geopolitical order, leading to a new era of deglobalization.
May 17, 2022
Recent inflation surges have modestly affected long-term expectations
Improvements in Federal Reserve credibility over the last 40 years have ensured that inflation expectations, particularly long-term inflation expectations, have so far remained well-anchored despite surging current inflation.
April 05, 2022
Research Department Working Papers
Dynamic Identification Using System Projections on Instrumental Variables
This paper proposes System Projections on Instrumental Variables (SP-IV) to estimate structural relationships using regressions of structural impulse responses obtained from local projections or vector autoregressions.
March 30, 2022
Real-time market monitoring finds signs of brewing U.S. housing bubble
There is growing cause for concern that U.S. house prices are again becoming unhinged from fundamentals.
March 29, 2022
The Russian oil supply shock of 2022
In the immediate aftermath of Russia’s invasion of Ukraine in late February, early estimates suggested that perhaps 3 million barrels a day (mb/d) of petroleum production had been effectively removed from the global oil market, constituting one of the largest supply shortfalls since the 1970s.
March 22, 2022
Nominal GDP outlook suggests it’s time to end monetary accommodation
We argue that the policy response to COVID-19 has been broadly on track to date but that continued monetary accommodation (lowering interest rates or purchasing assets) risks fueling excessive inflation.
January 13, 2022