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A 2017 paper, "Using the Richmond Fed Manufacturing Survey to Gauge National and Regional Economic Conditions", corroborates that the Richmond Fed employment diffusion index performs reasonably well at explaining changes not just at the regional level, but also at the national level. The 2020 paper "The Information Content and Statistical Properties of Diffusion Indexes" disaggregates BLS employment change into an intensive and extensive margin and finds that variations in overall employment growth arise primarily from changes in the quasi-extensive margin. Diffusion indexes are a useful way to summarize economic information from surveys because they are easy to understand and correlate well with economic activity over time. [Extracted from the article]

Figure 1a. Economic Activity and Credit Market Sentimentin the U.S. Economic Activity Factor Figure 1b: Economic Activity and Credit Market Sentimentin the U.S. Credit Market Sentiment Factor Figure 1c: Economic Activity and Credit Market Sentimentin the U.S. Probability of an Adverse Economic State As shown in Figure 1a, the economic activity factorcaptures well the declines in economic activity duringrecessions, as well as the quick rebound from the recentCOVID crisis. Fluctuations inthe credit market sentiment factor are associated withstrong asymmetric and nonlinear effects on economicactivity, depending not only on the magnitude and sign ofa credit market sentiment shock but also on the currenteconomic conditions. Economic Brief In a forthcoming paper, we develop a newsignal-extraction statistical model to estimate a factorsummarizing conditions in U.S. credit markets. [Extracted from the article]

Opinion. Comments on the paper by Jerome Stein about the Federal Reserve's role in improving the economic condition of the United States. Function of the M2 aggregate as a monetary indicator to guide monetary policy; Federal Reserve's achievement of price stability; Relationship between M2 growth and a particular economic variable; Interpretation of evidence on monetary indicators.

Measuring the overall restrictiveness of a country's international trade policies is important and, in fact, essential for estimating the effects of trade policies and for negotiations to reduce trade barriers. A good measure is also difficult to produce: Trade restrictiveness indices are constructed by combining the actual structure of trade restrictions, which is generally quite different across goods, into a single number. Under certain assumptions, this single number is the uniform tariff that would produce the same trade restrictiveness as the actual differentiated structure of restrictions. In this paper, the economic intuition underlying the construction of these indices is presented and estimates of these indices and the resulting insights are summarized. [ABSTRACT FROM AUTHOR]

The article discusses Chinese GDP growth rates remain impressive compared to seen in developed market economies, the Chinese economy has decelerating the 2007-09 Great Recession. Topics include attribute to data collection and construction issues within statistical authorities at both the local and national levels; and the resulting indicator points to a greater degree of cyclicality in Chinese economic growth than official statistics reflect.

The phrase "liquidity effect" was introduced by Milton Friedman (1969) to describe the first of three effects on interest rates caused by an exogenous change in the money supply. The lack of empirical support for the liquidity effect using monthly and quarterly monetary and reserve aggregates data led Hamilton (1997) to suggest that more convincing evidence of the liquidity effect could be obtained with daily data—the daily liquidity effect. This paper investigates the implications of the daily liquidity effect for Friedman's liquidity effect using a more comprehensive model of the Federal Reserve's daily operating procedure than has been previously used in the literature. The evidence indicates that it is no easier to find convincing evidence of a Friedman liquidity effect using daily data than it has been with lower-frequency monthly and quarterly data. [ABSTRACT FROM AUTHOR]

Some analysts and economists recently warned that the U.S. economy faces a much higher risk of recession should the price of oil rise to $100 per barrel or more. In February 2008, spot crude oil prices closed above $100 per barrel for the first time ever, and since then they have climbed even higher. Meanwhile, according to some surveys of economists, it is highly probable that a recession began in the United States in late 2007 or early 2008. Although the findings in this paper are consistent with the view that the U.S. economy has become much less sensitive to large changes in oil prices, a simple forecasting exercise using Hamilton's model augmented with the first principal component of 85 macroeconomic variables reveals that a permanent increase in the price of crude oil to $150 per barrel by the end of 2008 could have a significant negative effect on the growth rate of real gross domestic product in the short run. Moreover, the model also predicts that such an increase in oil prices would produce much higher overall and core inflation rates in 2009 than most policymakers expect. [ABSTRACT FROM AUTHOR]

Debt crises in emerging markets have been linked to large fiscal deficits, high inflation rates, and large devaluations. This article studies a sovereign default model with domestic fiscal and monetary policies to understand Argentina's experience during the 2000s commodity boom (2005-2017), following the default of 2001. The model suggests that domestic policies played a critical role in Argentina's poor economic performance. Despite exceptionally favorable terms of trade, a rise in government spending led to higher taxation, inflation and currency depreciation, and lower output. Economic performance would have been worse had Argentina followed a strict, rather than accommodative, monetary policy without curbing its expansionary fiscal policy. Finally, limited access to international credit markets during this episode did not appear to play a significant role. [ABSTRACT FROM AUTHOR]

The authors study the internal organization of small business partnerships and focus on the number of owners and ownership structure and the dynamics of these variables. They find that partnerships tend to have a small number of owners with equal distribution of ownership shares. Moreover, while partnerships with equally distributed shares tend to keep this distribution constant, those with unequally distributed shares tend to move toward more equal distribution over time. The authors highlight that these facts are in line with the theory of private information in small business partnerships proposed by Espino, Kozlowski, and Sánchez (2014). [ABSTRACT FROM AUTHOR]

The article presents research paper about the methodological inquiry of how to measure the real value of the real output of bank services. It states that the paper shows that the bias of the deflated-balance series differs across types of bank services, countries and over time. Moreover, it notes that the official estimate of European bank output growth is most probably biased relative to that of the U.S.

Economists agree that inflation is a monetary phenomenon, but since 1982, monetary policymakers have demoted measures of the money supply from prime targets to key indicators to incidental byproducts. With excess bank reserves at all-time highs, however, measures of money may have a renewed purpose as red fl ags for inflation. [ABSTRACT FROM AUTHOR]

There has been a resurgence of interest in dynamic factor models for use by policy advisors. Dynamic factor methods can be used to incorporate a wide range of economic information when forecasting or measuring economic shocks. This article introduces dynamic factor models that underlie the data-rich methods and also tests whether the data-rich models can help a benchmark autoregressive model forecast alternative measures of inflation and real economic activity at horizons of 3, 12, and 24 months ahead. The authors find that, over the past decade, the data-rich models significantly improve the forecasts for a variety of real output and inflation indicators. For all the series that they examine, the authors find that the data-rich models become more useful when forecasting over longer horizons. The exception is the unemployment rate, where the principal components provide significant forecasting information at all horizons. [ABSTRACT FROM AUTHOR]

The analysis in this article was presented to the Federal Open Market Committee as background for its discussion of the Federal Reserve's review of monetary policy strategy, tools, and communication practices. The Committee discussed issues related to the review at five consecutive meetings from July 2019 to January 2020. References to the Federal Open Market Committee's current framework for monetary policy refer to the framework articulated in the "Statement on Longer-Run Goals and Monetary Policy Strategy" first issued in January 2012 (FOMC, 2021). [ABSTRACT FROM AUTHOR]

Analyzes the relevance of personal saving behavior as an indicator of real economic growth. Concentration and measurement of household wealth; Debt; Empirical data on the relation between investment and saving rates; Models of Solow, Lucas, and Greenwood and Jovanovic.

Argues that the consumer price index (CPI) is still the most reliable indicator of changes in inflation despite the existence of alternative indexes in the United States. Criticisms on the CPI; Criteria that must be followed by analysts in constructing an aggregate price index; Problems that have been identified in alternative indexes.

Presents various charts of economic indicators of the United States, as of July 2003. Output, capacity and capacity utilization; Industrial production; Manufacturing output; Final products and nonindustrial supplies; Industry groups.

The article analysis research paper about the effects of estimated macroeconomics to the federal reserve's large-scale treasury program. It states that the authors apply a set of model to attempt setting apart the effects that the program may have on interest rates, employment rates, and real spending gross domestic product (GDP). Moreover, it notes that the Boston model suggests that it will require two years for the lagged impact to be fully actualized in the U.S. economy.

The authors use a dynamic latent factor model to analyze comovements in OECD surpluses. The world factor underlying common fluctuations in budget surpluses across countries explains an average of 28 to 44 percent of the variation in individual country surpluses. The world factor, which can be interpreted as a global budget surplus index, declines substantially in the 1980s, rises throughout much of the 1990s, peaks in 2000, and declines again after the financial crisis of 2008. The authors then estimate similar world factors in national output gaps, dividend-to-price ratios, and military spending that significantly explain the variation in the world budget surplus factor. Idiosyncratic components of national budget surpluses correlate with well-known "unusual" country circumstances, such as the Swedish banking crisis of the early 1990s. [ABSTRACT FROM AUTHOR]

Analyzing and forecasting the performance and direction of a large, complex economy like that of the United States is a difficult task. The process involves parsing a great deal of data, understanding key economic relationships, and assessing which events or factors might cause monetary or fiscal policymakers to change policy. One purpose of this article is to reinforce several key principles that are useful for tracking the U.S. economy's performance in real time. Two principles stand out: First, the economy is regularly hit by unexpected economic disturbances (shocks) that policymakers and forecasting models cannot predict. Second, most key data used to measure the economy and track its performance are often revised-and by substantial amounts. [ABSTRACT FROM AUTHOR]

This study offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. We lay out the record from the start of 1979 through the spring of 1980, relying almost exclusively on contemporaneous sources, including the recently released transcripts of Federal Open Market Committee (FOMC) meetings during 1979. We then present and discuss in detail the reasons for the FOMC's adoption of the reform and the communications challenge presented to the Committee during this period. Further, we examine whether the essential characteristics of the reform were consistent with monetarism; new, neo, or old-fashioned Keynesianism; nominal income targeting; and inflation targeting. The record suggests that the reform was adopted when the FOMC became convinced that its earlier gradualist strategy using finely tuned interest rate moves had proved inadequate for fighting inflation and reversing inflation expectations. The new plan had to break dramatically with established practice, allow for the possibility of substantial increases in short-term interest rates yet be politically acceptable, and convince financial market participants that it would be effective. The new operating procedures were also adopted for the pragmatic reason that they would likely succeed. [ABSTRACT FROM AUTHOR]

The article discusses a technical aspect of the monetary targeting procedure of the Federal Reserve which is known as base drift. Fed announced target ranges for the growth of M1 and other monetary aggregates since 1975. The term base drift, refers to the Fed's practice of using the actual dollar level of an aggregate in the base quarter as the base level for the target range, rather than the midpoint of the targeted range set in the preceding targeting period.

In the United States and Europe, central banks have essentially been the only policymaking entities consistently willing and able to take bold measures to deal with an unusually complex set of national, regional, and global economic and financial challenges since the onset of the Great Recession and financial crisis. The author advocates for other agencies, in both the public and private sectors, to urgently work in conjunction with central bank policies. He states that it is critical that policymakers, business leaders, investors, and researchers alike understand better why so many unthinkable events have become facts, why the outlook remains "unusually uncertain," and what changes are needed to limit the risks of further disruptions and bad surprises down the road. Central banks may find themselves facing one of two extremes: complementing policies by other agencies that put the global economy back on the path of high sustained growth and ample job creation or cleaning up in the midst of a global recession, forced deleveraging, and disorderly debt deflation. [ABSTRACT FROM AUTHOR]

The article offers an overview of the foreign exchange swap line program in the U.S. It identifies the global disruptions to dollar funding markets in 2007 and 2008. It describes the initial structure of the program and the revision of the structure during the 2008 to 2009 global financial crisis. It further examines how indicators of funding pressures carried out over the program's two-year course and presents results from several dollar funding operations accomplished through the swap lines.

The article focuses on the alternative measures of gross domestic product (GDP) and how they affect GDP's interpretation in the U.S. It emphasizes a measure that is different from other published series and capable of addressing economic issues by estimating investment in research and development (R&D), similar intangible items and fraction of wages paid to women. It shows the significance of GDP's correlation with unemployment and inflation in making it a good measure of the country's economy.

Trend growth in the labor force is a key determinant of trends in employment and gross domestic product (GDP). Forecasts by Macroeconomic Advisers (MA) have long anticipated a marked slowing in trend growth of the labor force that would contribute to a slowing in potential GDP growth. This is reflected in MA's forecast that the aggregate rate of labor force participation will trend down, especially after 2010, largely in response to the aging of the baby boom generation, whose members are beginning to approach typical retirement ages. Expectations for a downward trajectory for the participation rate and a slowing in trend labor force growth are not unique. However, this article reports on MA research suggesting that the opposite is possible: that the slowdown in trend labor force growth could be relatively modest and that the trend in the aggregate rate of labor force participation will decline little, if at all, over the next decade. [ABSTRACT FROM AUTHOR]

Potential output is an estimate of the level of gross domestic product attainable when the economy is operating at a high rate of resource use. A summary measure of the economy's productive capacity, potential output plays an important role in the Congressional Budget Office (CBO)'s economic forecast and projection. The author briefly describes the method the CBO uses to estimate and project potential output, outlines some of the advantages and disadvantages of that approach, and describes some of the challenges associated with estimating and projecting potential output. Chief among these is the difficulty of estimating the underlying trends in economic data series that are volatile, subject to structural change, and frequently revised. Those challenges are illustrated using examples based on recent experience with labor force growth, the Phillips curve, and labor productivity growth. [ABSTRACT FROM AUTHOR]

The article analyzes the dynamics on headline and core inflations on a sample period of 1959-2007. It explores the changes in these dynamics which are influenced by monetary policy. It also explains the influential characteristics of deflation factors such as the consumer price index (CPI) and personal consumption expenditure (PCE). Realizing the changes on these inflations, it suggests that headline and core measures are co-integrated.

The article focuses on the significance of economic development incentives in stimulating local economies. Some broad measures may produce significant results over the long run. Targeted measures crafted to attract or retain business offer the possibility of a quick payoff. Public interest in incentives has generally been muted, except when very generous incentive packages, egregious practices, pr legal issues have prompted questions about their appropriateness and effectiveness.

The article reports on the move of the U.S. Federal Reserve to publish revisions to its index of industrial production (IP) and the related measures of capacity utilization. The revision shows that IP have increased more slowly in 2006, but changes to output gains in other years since 2003 were more modest. It also illustrates that the rates of capacity utilization for total industry in the fourth quarters of 2006 and 2007 were lower than previously estimated.

The article focuses on the issue concerning the monetary policy implementation in the U.S. It states that the Federal Reserve Board aims to adjust the total supply of reserve balances so that it equals demand at exactly the target rate of interest. It says that the critical issue in the implementation process is the sensitivity of the market interest rate to unanticipated changes in supply and demand. It adds that if small estimation errors lead to large swings in the interest rate, a central bank will find it difficult to effectively implement monetary policy to consistently hit the target rate.

The article focuses on the measures in the U.S. in countering core inflation. It evaluates these measures of core inflation, including popular ex food and energy series, an ex energy series and weighted median series. It focuses on inflation measures likely to realize the goals for the U.S. monetary policy. Moreover, it also provides explanatory and forecasting capabilities of the core measures of inflation.

The article focuses on a Taylor rule that deals with the three main features of the period of Alan Greenspan as chairman of the U.S. Federal Reserve. It is said that a Taylor rule evaluated using the Greenbook core consumer price index (CPI) inflation forecasts and real-time Congressional Budget projections of the output gap estimates the actual path of the federal funds rate from 1987 to 2000. The author mentions that there were times when the Federal Reserve under Greenspan is off the estimated rule.

The article focuses on the revisions to the index of industrial production and the related measures of capacity and capacity utilization made by the U.S. Federal Reserve Board. The said revision affected the data from 1972 to October 2006. The updated measures of production, which incorporate the Census Bureau's 2004-2005 Annual Surveys of Manufacturers (ASM), show slightly lower annual levels of output than previously estimated.

While homeland security is widely seen as an important national objective, the costs of this effort are not well understood. An analysis of public and private expenditures on homeland security shows that overall spending rose by $44 billion between 2001 and 2005--a clear increase but one that represents a gain of only ¼ of 1 percent as a share of U.S. GDP. Private sector expenditures increased very modestly in dollar terms and remained unchanged as a fraction of the sector's GDP. [ABSTRACT FROM AUTHOR]

The article highlights developments in the credit card market and the financial obligations ratio as of October 2005. Key market developments are improvements in credit-securing technology and the advent of risk-based pricing of credit card debt which have increased the share of households, variation in credit card interest rates and the increased usage of credit cards by households. INSETS: Theories of Credit Card Interest Rate "Stickiness";Substitution between Credit Cards and Other Forms of Credit.

Discusses a study being done on the expanding gap between services inflation and goods inflation. Implication of the permanent increases and reductions experienced by the goods and services inflation for its behavior; Reasons for the positive average value of the measured gap by the personal consumption expenditures (PCE) deflator; Advantage of using consumer price index over PCE.

Focuses on the asymmetric effects of monetary policy on real aggregate activity using U.S. postwar quarterly data. Overview of the regime-switching mathematical model of Hamilton used in testing for asymmetric effects; Theoretical possibilities for asymmetric effects of nominal demand on real output; Use of federal funds rate as an indicator of monetary policy.

Discusses the theory of purchasing power parity as one of the foundations of international economics using international hamburger prices. Illustration of the principles and limitations of purchasing power parity; Indicators of purchasing power parity worldwide in 2000; Barriers to the trade; Explanation for the deviations from purchasing power parity.

Focuses on Tech-Pulse Index as an indicator to assess the activity in the U. S. technology sector. Conference Board indicators used in the index; Growth in real gross domestic product in the U. S. economy; Technological innovations that boost the technology sector.

Discusses economic developments in the context of the key differences between the 2001 recession and the post-World War II recession. Features of the recession periods; Data on economic indicators which fared during the 2001 recession relative to their postwar average; Growth of various economic series during post-war recessions.

Focuses on the developments of price hedonics. Reassessment of price hedonics and its role in the consumer price index; Structure and interpretation of the price hedonic model; Critique of the hedonic regression model; Political economy of price hedonics.

Examines the range of leading economic indicators during the recession in the U.S. that began in March 2001. Assessment of the quantitative review of the 2001 recession; Forecasts on the recession based on individual leading indicators; Performance during the 2001 recession of combination forecasts.

Examines the monetary policy in the U.S. Effects of monetary policy on consumer spending; Status of economic indicators; Importance of the rate of inventory liquidation in the production; Profitability of the nonfinancial corporate sector. INSET: Monetary Policy after the Terrorist Attacks.

Presents statistics illustrating non-financial economic indicators in the United States for June 2001. Business activity; Labor force trends; Industrial output capacity and capacity utilization.

Examines the information contained in financial variables using nonlinear, nonparametric method multivariate adaptive regression splines (MARS). Advantages of using MARS; Comparison of in-sample and out-of sample recession forecasting; Effectiveness of the method in providing useful forecasts.

Provides information on a study that developed and described an index of leading economic indicators (LEI) for New York and New Jersey over the 1972-1999 period. Existing state indexes of LEI as of March 2001; Indexes of future economic activity for New York and New Jersey; Results and conclusions.

Presents the United States' domestic nonfinancial statistics as of July 2000. Nonfinancial business activities; Labor force, employment and unemployment; Output, capacity and capacity utilization; Industrial production; Housing and construction; Consumer and producer prices; Gross domestic product and income; Personal income and savings; U.S. international transactions; U.S. foreign trade.

Presents nonfinancial statistics in the United States as of February 1999. Nonfinancial business activity; Labor force, employment and unemployment; Output, capacity and capacity utilization; Industrial production.