Research Department Working Papers
Trade Costs and Inflation Dynamics
This paper exploits bilateral trade flows of final and intermediate goods together with the structure of static trade models that deliver gravity equations to identify exogenous changes in trade costs between countries. The authors then use a local projections approach to assess the effects of trade cost shocks on consumer price (CPI) inflation.
March 04, 2025
Evidence suggests U.S. house price/rent ratio, real home prices to decline
The ratio of house prices to rents in the U.S. has risen 20 percent since first quarter 2020, coinciding with the beginning of the pandemic. The ratio is near its previous high in 2006. The future course of inflation may well be influenced by how this now-lofty ratio reverts to a more usual level.
February 25, 2025
Speech by President Lorie K. Logan
Efficient and effective central bank balance sheets
At a Bank of England conference on central bank balance sheets, President Lorie Logan laid out two key principles: efficient and effective. It’s heartening that central banks around the world have converged on some approaches to uphold these twin principles.
February 25, 2025
Is inflation still slowing? Early 2025 data pivotal to outlook
January inflation data were stronger in 2023 and 2024 than forecasters expected, even after more encouraging results had been reported for the ends of 2022 and 2023. Rather than reflecting seasonal adjustment difficulties, this pattern may be caused by a large share of firms changing prices at the start of a new year.
February 11, 2025
Speech by President Lorie K. Logan
Opening remarks for panel on ‘Future challenges for monetary policy in the Americas’
At the Bank for International Settlements’ Chapultepec Conference, Dallas Fed President Lorie K. Logan discussed future challenges for monetary policy in the Americas and the role of the neutral interest rate.
February 06, 2025
Research Department Working Papers
Dynamics of Market Power in Monetary Economies
This paper studies the dynamic interplay between monetary policy and market power in a decentralized monetary economy. Building on Choi and Rocheteau (2024), its key innovation is to model rent seeking as a process that takes time, allowing market power to evolve gradually.
January 07, 2025
Research Department Working Papers
Monetary Policy Interactions: The Policy Rate, Asset Purchases and Optimal Policy with an Interest Rate Peg
This paper studies monetary policy in a New Keynesian model with a variable credit spread and scope for central bank asset purchases to matter.
November 09, 2024
International factors broadly explain postpandemic inflation
The recent co-movement of inflation across countries, including the U.S., can be explained in part by global and regional factors. Policymakers, who have tended to more closely look closer to home may want to more broadly consider global events and pressures when addressing changing inflation pressures.
October 22, 2024
Speech by President Lorie K. Logan
Normalizing the FOMC’s monetary policy tools
President Lorie K. Logan describes policy considerations for normalizing the Fed’s assets and liabilities.
October 21, 2024
Rising unemployment does not mean recession is inevitable
The sort of increase seen in the U.S. unemployment rate over the past year is an oft-noted predictor of recession. Yet, forecasters currently expect only a modest increase in unemployment with no recession. Is this a reasonable expectation, and if so, how is this unemployment episode different from others?
October 08, 2024