Federal Reserve

FEDS Paper: QE, Bank Liquidity Risk Management, and Non-Bank Funding: Evidence from U.S. Administrative Data

Matthew R. Darst, Sotirios Kokas, Alexandros Kontonikas, Jose-Luis Peydro, and Alexandros P. VardoulakisWe show that the effectiveness of unconventional monetary policy is limited by how banks adjust credit supply and manage liquidity risk in response to fragile non-bank funding. For identification, we use granular U.S. administrative data on deposit accounts and loan-level commitments, matched with bank-firm supervisory balance sheets.

FEDS Paper: Effect of the GSIB surcharge on the systemic risk posed by the activities of GSIBs

Marco Migueis, Sydney PeirceThis study assesses whether the introduction of the GSIB surcharge requirement resulted in GSIBs reducing the systemic risk posed by their activities. We find limited evidence of GSIBs managing their activities to avoid increases in their surcharges. For a sample of international banks, proximity to surcharge thresholds is associated to a decrease in the growth of intra-financial system liabilities, underwriting activities, and holdings of trading and available-for-sale securities.

FEDS Paper: Household Debt, the Labor Share, and Earnings Inequality

Mark Robinson, Pedro Silos, and Diego VilánWe show that the secular decline in real interest rates in the United States, which began in the early 1980s and persisted for nearly four decades, reduced the labor’s share of output and the unemployment rate, and increased earnings inequality. We establish this link using a model of frictional labor markets, estimated from household-level data, in which unemployment risk is only partially insurable.

FEDS Paper: Monetary Policy Strategy and the Anchoring of Long-Run Inflation Expectations

Michael T. KileySince the 1990s, monetary policy research has highlighted the properties of policy rules that stabilize inflation and economic activity, the role of inflation targeting in anchoring expectations, and the constraints posed by the effective lower bound (ELB). This paper combines these themes by examining whether explicitly responding to long-run inflation expectations improves policy effectiveness.

FEDS Paper: Energy Consumption and Inequality in the U.S.: Who are the Energy Burdened?

Octavio M. Aguilar and Cristina Fuentes-AlberoUsing a broad definition of energy consumption that includes both residential energy use and gasoline for transport, we identify 20% of households in the PSID as energy burdened (EB) based on a twice-the-median, income-based threshold. Logit analysis shows that being nonwhite, being single with dependents, receiving public assistance, having no post-secondary education, and being unemployed increase the probability of being EB.

FEDS Paper: The Evolution of Inflation Targeting from the 1990s to 2020s: Developments and New Challenges

Michael T. Kiley and Frederic S. MishkinSince the initial launch of inflation targeting in the early 1990s in New Zealand and a few other countries, inflation targeting has become the predominant monetary policy strategy in large advanced and emerging market economies. Inflation targeting has been remarkably successful in anchoring inflation, likely owing to core elements of the framework across central banks.

FEDS Paper: From Friedman to Taylor: The Revival of Monetary Policy Rules in the 1990s

Edward NelsonThis paper examines the revival in the analysis of monetary policy rules that took place during the 1990s. The focus is on the role that John Taylor played in this revival. It is argued that Taylor’s role—most notably through his advancing the Taylor rule, developed in 1992−1993 and increasingly permeating discussions in research and policy circles over the subsequent several years—is usefully viewed as one of building bridges.

Pages

Subscribe to Federal Reserve