Economics

Federal Reserve decided to cut rate by an supersized 0.5 percentage point. The decision finally ended the weeks-long market debate of whether the central bank would cut 25 or 50 basis points. One important thing, though, didn't reach the headline: The Fed has never been this "confused" about where the natural rate should be.

In a recent NBER working paper "Monetary Policy Communications and their Effects on Household Inflation Expectations", economists Olivier Coibion, Yuriy Gorodnichenko and Michael Weber tried to find out how the household's expectation for inflation change with regard to the information they received.

Dissent votes in Federal Reserve policy meetings are rare, accounting for only 6.37% of the votes between 1976 and 2017. However, opting not to vote against the FOMC consensus doesn't necessarily mean committee members don't "disagree" with it.

Countries with swap line arrangement with Federal Reserve, be it the standing ones or temporary, saw smaller increases in spread during the initial pandemic stress period.

In his latest Brookings blog post "Modifying the Fed’s policy framework: Does a higher inflation target beat negative interest rates?", Ben Bernanke compares two...

Macroprudential policies, it is argued, are more targeted and can complement central bank’s use of interest rate policy.

Long-run stability of the velocity, or the filpside of it, money demand, however, is not a empirically founded assumption.

The Fiscal Theory of the Price Level says that money has value because the government accepts it for taxes, and inflation is fundamentally a fiscal phenomenon

In a recent IMF working paper "Overfitting in Judgment-based Economic Forecasts: The Case of IMF Growth Projections", economist Klaus-Peter Hellwig examined IMF's World Economic Forecasts (WEO) and check if the forecast model suffer from the problem of overfitting.

Or, to frame the question in a more technical way: is tipflation even counted as part of Consumer Price Index (CPI) inflation?