Pablo Cuba-Borda, Albert Queralto, Ricardo Reyes-Heroles, and Mikaël ScaramucciWe study how trade cost shocks influence inflation. Using bilateral trade flows from detailed global input-output data and a gravity framework, we estimate trade cost shocks and their effects on CPI inflation.
Something dangerous is happening to the U.S. economy, and it’s not inflation or trade wars. Chaotic deregulation and the selective enforcement of laws have upended markets and investor confidence. At one point, the threat of tariffs and resulting chaos evaporated US$4 trillion in value in the U.S. stock market. This approach isn’t helping the economy, and there are troubling signs it will hurt both the U.S.
Something dangerous is happening to the U.S. economy, and it’s not inflation or trade wars. Chaotic deregulation and the selective enforcement of laws have upended markets and investor confidence. At one point, the threat of tariffs and resulting chaos evaporated US$4 trillion in value in the U.S. stock market. This approach isn’t helping the economy, and there are troubling signs it will hurt both the U.S.
Musician Jimmy Buffett and his wife, Jane Slagsvol, attend a Lincoln Center for the Performing Arts event in 2018 in New York.
The Parker administration says it will issue $800 million in bonds over the next four years to fund affordable housing.
We characterize optimal monetary policy under state-dependent pricing. The framework gives rise to nonlinear inflation dynamics: The flexibility of the price level increases after large shocks due to an endogenous rise in the frequency of price changes. In response to large cost-push shocks, optimal policy leverages the lower sacrifice ratio to curb inflation. When faced with total factor productivity shocks, an efficient disturbance, the optimal policy commits to strict price stability. The optimal long-run inflation rate is just above zero.
We characterize optimal monetary policy under state-dependent pricing. The framework gives rise to nonlinear inflation dynamics: The flexibility of the price level increases after large shocks due to an endogenous rise in the frequency of price changes. In response to large cost-push shocks, optimal policy leverages the lower sacrifice ratio to curb inflation. When faced with total factor productivity shocks, an efficient disturbance, the optimal policy commits to strict price stability. The optimal long-run inflation rate is just above zero.
The Bank of England is asking the public to give their views on what theme they would like to see represented in the design of the next series of banknotes – through a consultation launching today (2 July 2025).
Ralf R. Meisenzahl, Friederike Niepmann, and Tim Schmidt-EisenlohrThis paper documents a new dollar channel that transmits monetary policy across borders. Exploiting unique features of the syndicated loan market for identification, we show that changes in the euro-dollar exchange rate around ECB monetary policy announcements that are orthogonal to simultaneous changes in euro-area interest rates and stock prices affect U.S.
Giovanni Favara, James Graham, and Geng LiHome-related spending in categories such as furnishings, renovations, and repairs is tied to housing market activity, with significant implications for aggregate expenditure dynamics. We refer to this relationship as the home purchase channel of expenditure.
