What Japan, the US, and Europe have in common is growing popular anger over the economy despite high stock prices and low unemployment.
Why ruling parties were defeated in US and Japanese elections
Negative economic shocks can cause waves of investor pessimism about the resilience of banks, which, in turn, generate additional adverse macroeconomic effects. This is commonly cited as an explanation for the economic havoc wrought by the global financial crisis of 2007-08. We introduce the notion of pessimism in a real business cycle model, which is a standard framework for business cycle analysis. The possibility of waves of pessimism generates countercyclical demand from banks for liquid assets (e.g., bank reserves).
The firehose of affluent consumption continues to drive inflation, not the stimulus package
It must be the Wall Street Journal’s DNA. Nothing else easily explains why the normally careful Nick Timiraos would focus so much of his account of “How the Democrats Blew It on Inflation” on the hoary argument that the “Biden Stimulus” somehow triggered worldwide inflation back in 2021.
Earlier investments make large-scale emission reductions easier to do over time because their unit costs drop
Everyone recognizes that the costs of automobiles, washers, jet planes, and hundreds of other products usually drop with mass production. Most products get cheaper when they stream out of workplaces not by the dozens, but by the tens of thousands, or even millions.
Lincoln Mitchell, Political Science Professor at Columbia University, discusses the increasingly powerful fascist movement in the US., outlining the elements of fascism present in the MAGA movement, including its dependence on a strongman leader, the scapegoating of minorities, threats of violence and curtailing of freedoms of speech and assembly.
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Is the burden of distress in the banking sector shared equally among households, or is it distributed unevenly? Following the global financial crisis, the economic consequences of severe disruptions to the banking sector and the unequal impact of recessions have become a key concern of macroeconomic policy. This article examines how temporary banking sector losses affect households differently according to their income levels. The analysis reveals that low-income households bear most of the burden, while high-income households tend to be less adversely affected.
This article analyses how monetary policy shapes the aggregate and distributional effects of an energy price shock. Based on the observed heterogeneity in consumption exposures to energy and household wealth, we build a quantitative small open-economy Heterogeneous Agent New Keynesian (HANK) model that matches salient features of the euro area data. The model incorporates energy as both a consumption good for households with non-homothetic preferences as well as a factor input into production with input complementarities.
What factors could drive transactional demand for central bank digital currency (CBDC)? We analyse payment survey data to arrive at a framework for understanding the role of adoption frictions and design strategies in shaping CBDC demand. The results of our analysis show that, while consumers may initially prefer to use more traditional payment methods, a design tailored to their specific needs could significantly increase CBDC uptake. Raising awareness and capitalising on network effects could also boost demand for CBDC.
