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In recent years, the global economy has been hit by a sequence of severe shocks that affected the two largest economies, the USA and the Euro Area, severely. Uncertainties about the future abound. While the challenges are similar for both economies and the policy tools resemble each other, they apply to different economic landscapes. What can they learn from each other? This paper looks at the basic structural facts, the nature of uncertainty shocks, and the efficiency of policy tools in the two economies. The key to understanding recent developments is uncertainty. This paper argues that the channel through which uncertainty influences inflation, wage cost, and unemployment is the markup firms charge to cover their cost of capital. While the measurements of uncertainty are uncertain, adding a proxy for uncertainty can improve the estimates of the basic New Keynesian model. The Federal Reserve Bank has been more successful because it operates in a more integrated capital market. In the Euro Area, uncertainty is higher than in the US and this could make disinflation in Europe more painful in terms of unemployment. [ABSTRACT FROM AUTHOR]

The main objective of this paper is to analyse investment returns using a stochastic model and inform investors about the best stock market to invest in. To this effect, a Markov chain random walk model was successfully developed and implemented on 450 monthly market returns data spanning from January 1976 to December 2020 for Canada, India, Mexico, South Africa, and Switzerland obtained from the Federal Reserves of the Bank of St. Louis. The limiting state probabilities and six-month moving crush probabilities were estimated for each country, and these were used to assess the performance of the markets. The Mexican market was observed to have the least probabilities for all the negative states, while the Indian market recorded the largest limiting probabilities. In the case of positive states, the Mexican market recorded the highest limiting probabilities, while the Indian market recorded the lowest limiting probabilities. The results showed that the Mexican market performed better than the others over the study period, whilst India performed poorly. These findings provide crucial information for market regulators and investors in setting regulations and decision-making in investment. [ABSTRACT FROM AUTHOR]

The article discusses various topics related to economics and policy. It begins by highlighting the unexpected decline in inflation and the concerns of economists regarding the potential reversal of this trend. The Paycheck Protection Program (PPP) is then examined, with the authors arguing that it reached a significant number of smaller businesses, including those in minority and lower-income communities. The importance of human elements in housing transactions is explored, along with the impact of interest rates on the transition to senior independent living units. The article also includes papers on the development of Macau, a book review on the retirement challenge, and a review of the Federal Reserve's actions during the pandemic. Finally, the passing of economist Robert Solow is acknowledged. [Extracted from the article]

One of the signature policy achievements of the Progressive era was the passage of the Federal Reserve Act in 1913. This paper argues that the original Act did not create an effective central bank and consequently did not bring about significant structural change in domestic monetary institutions. Early leaders of the Federal Reserve, frustrated with the constraints on reserve bank operations, actively lobbied Congress to secure changes to the Act. These efforts only succeeded after the U.S. entered World War 1 in the spring of 1917, triggering a transformation in the monetary base that elevated the position and centrality of the Federal Reserve. Seen in this light, the wartime amendments were a victory for the activist institution-builders within the Federal Reserve in addition to being essential for the federal government's ability to finance the war effort. [ABSTRACT FROM AUTHOR]

This document is a foreword from the incoming president of the American Economic Association (AEA) regarding the association's annual meeting in 2024. The program for the meeting consisted of sessions, papers, and panels submitted by AEA members, with a focus on research relevant to economic inequalities, particularly those affecting children and families. The program included a wide range of topics such as the social safety net, racial and gender disparities, gun violence, contraception, education, and childcare. The document also mentions various awards and honors presented at the meeting, as well as webcasts of panel sessions and lectures available on the AEA website. [Extracted from the article]

This article is based on the Homer Jones Memorial Lecture delivered at the Federal Reserve Bank of St. Louis, November 2, 2023. Headline inflation in the euro area declined rapidly to 2.9% in October 2023 from its peak of 10.6% one year earlier. The bulk of this large drop reflected the substantial decline in the contributions from energy and food inflation. Once these base effects reverse, continued disinflation relies critically on monetary policy succeeding in reducing underlying inflation in a steady and timely manner. The last mile is about this change in the disinflation process. Large uncertainty around the appropriate calibration and effective transmission of monetary policy, together with the risk of new supply-side shocks pulling inflation away from our target once again, makes this part of the disinflation process the most difficult. In particular, monetary policy transmission may be weaker, or less direct, than in the past, given the share of less-interest-rate-sensitive services industries in total activity has increased steadily in the euro area and globally over the past few decades. In addition, persistent worker shortages have muted the transmission through the labor market, with unemployment at record low levels despite the sharp increase in interest rates. So, although progress on inflation so far is encouraging, the disinflation process during the last mile will be more uncertain, slower, and bumpier. Continued vigilance is therefore needed. [ABSTRACT FROM AUTHOR]

With the economics profession working to increase diversity, this study investigates gender differences in attitudes about the Federal Reserve Bank of St. Louis' FREDcast® game used in teaching principles of macroeconomics. Student survey results show that females enjoy economics and the online game less than males. This evidence of a gender difference adds to the literature that might be helpful to instructors as they work to foster inclusiveness and develop learning activities that appeal to and engage diverse students. [ABSTRACT FROM AUTHOR]

This article compares the current rate cycle to rate cycles in the 1980s to analyze the potential for a soft landing in the economy. It examines changes in the federal funds target rate, inflation, unemployment, and consumption growth to determine the type of landing that resulted from each rate cycle. The article emphasizes the importance of external shocks in influencing the economy and the rigidity of the landing. It concludes that while a soft landing is possible, it is crucial to monitor inflation and economic shocks in the coming months. [Extracted from the article]

The Doomsday Book is a collection of documents and memoranda compiled by the legal department of the Federal Reserve Bank of New York (FRBNY). The book focuses on financial crises [...]

This article explores event studies with continuous treatment, specifically focusing on the choices and decisions researchers must make when using Difference-in-Differences (DiD) methods. The authors propose transparent ways to aggregate the numerous causal parameters that arise in staggered DiD designs, taking into account treatment timing and intensity. They introduce various parameters of interest, such as average treatment effects and event study-type parameters. The article also discusses the identification of these parameters under traditional DiD assumptions. The text provides an application of this design to study the local economic effects of hydraulic fracking, demonstrating the results of event study estimates and dose-response curves. The conclusion highlights the importance of selecting appropriate aggregation methods based on the research question. [Extracted from the article]