The "modern monetary theory" tenet that governments can continuously print money to fund deficits ignores the fact that governments ultimately must satisfy creditors.
A new theory of economic development integrates two existing paradigms to show that reducing distortions in "big push" regions could unleash massive growth.
The U.S. might benefit from replacing physical cash with central bank digital currency, but first the Fed must resolve several policy and implementation issues.
Newly available data show that larger and less liquid banks use the discount window more actively and that holdings of bank reserves are negatively correlated with discount window borrowing. Access to the discount window affects bank portfolio decisions, in particular holdings of reserves, in subtle ways.
This brief discusses the main contributions that college-educated immigrants make to U.S. productivity growth, such as providing scarce skills that supplement and complement skills of native workers, contributing disproportionately to innovation and promoting job creation in the United States by foreign-based multinational corporations.
Research finds that first-time incarceration can decrease men's lifetime earnings as well as increase the number of years spent unemployed or out of the labor force.
High labor market churn in the COVID-19 recession may exacerbate barriers to sustained wage growth for workers in high-turnover service sector jobs.
Lending by small and large domestic banks, and foreign-related banks evolved in distinctly different ways during the first several months of the COVID-19 pandemic.
Conducting a statistical analysis of U.S. economic data, economists from the Richmond Fed and the University of Bern find no evidence of hysteresis, the idea that seemingly temporary economic shocks can have permanent effects.
Households' expectations often differ from formal economic forecasts. The researchers quantify these differences and explain them by developing a "theory of time-varying pessimism." Embedding their new theory into a quantitative economic model, they find that fluctuations in pessimism have significant effects on macroeconomic measures, most notably the unemployment rate.
By quantifying climate change's effects and assessing potential mitigation and adaptation techniques, economists contribute valuable perspectives to conversations about the planet's future. This brief summarizes presentations from the Richmond Fed's November 2020 conference on climate change economics.
In rapidly evolving crises, such as the COVID-19 pandemic, indexes of financial conditions based on high-frequency data give policymakers more timely information than better-known monthly or quarterly indicators.
