Turmoil in housing, credit and financial markets plunged the U.S. economy into a recession that has taken a heavy toll on the labor market. The weakness that began during the second half of 2007 gravely worsened during a period of extreme financial stress in 2008, and the labor market has yet to...

We review macroeconomic performance over the period since the Global Financial Crisis and the challenges in the pursuit of the Federal Reserve’s dual mandate. We characterize the use of forward guidance and balance sheet policies after the federal funds rate reached the effective lower bound....

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, we document that U.S. inflation rose post-FAIT considerably more than predicted had the strategy not...

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, we document that U.S. inflation rose post-FAIT considerably more than predicted had the strategy not...

We find empirical evidence of a possible structural break in the relationship between the foreign holdings of U.S. Treasury securities and the U.S. long-term interest rate occurring at the time when U.S. monetary policy became constrained at the zero-lower bound (ZLB). The estimated marginal...

Forecasts of global growth have historically been imprecise, punctuated by periods of optimism and pessimism. Inaccuracy in forecasting partly reflects quantifiable risks to the global outlook as well as economic uncertainty

We introduce the market resources method (MRM) for solving dynamic optimization problems. MRM extends Carroll's (2006) endogenous grid point method (EGM) for problems with more than one control variable using policy function iteration. The MRM algorithm is simple to implement and provides...

Forming a monetary union brings the benefits of a shared currency but also—as the experience of the euro area shows in the years following the global financial crisis—significant costs associated with the loss of monetary policy independence and exchange rate flexibility