Continue reading "Historical Echoes: I’ll Take “Happy Birthday, Fed!” for $400, Alex" »
Continue reading "Is Job Polarization Holding Back the Labor Market?" »
Continue reading "First Impressions Can Be Misleading: Revisions to House Price Changes" »
Jan J.J. Groen, Kevin McNeil, and Menno Middeldorp
An oil-price spike is often used as the textbook example of a supply shock. However, rapidly rising oil prices can also reflect a demand shock. Recognizing the difference is important for central bankers. A supply-driven increase in the price of oil can result in higher unemployment and inflation, leaving central bankers with the difficult decision to loosen policy, tighten policy, or not respond at all. A demand-driven increase reflecting global growth may support the case for tighter policy. In this post, we describe an approach for decomposing oil price changes into supply and demand shocks using financial market data.
Continue reading "A New Approach for Identifying Demand and Supply Shocks in the Oil Market" »
Continue reading "The Region’s Job Rebound from Superstorm Sandy" »
Continue reading "Historical Echoes: The Founding and Foundation of the New York Fed" »
Continue reading "Pick Your Poison: How Money Market Funds Reacted to Financial Stress in 2011" »
Kenneth D. Garbade
Note: This post draws on many sources contemporary with the events described, including various Treasury and Federal Reserve publications and news articles from the Wall Street Journal and the New York Times. These sources are fully documented in the PDF version of the post.
In the second half of 1953, the United States, for the first time, risked exceeding the statutory limit on Treasury debt. How did Congress, the White House, and Treasury officials deal with the looming crisis? As related in this post, they responded by deferring and reducing expenditures, by monetizing “free” gold that remained from the devaluation of the dollar in 1934, and ultimately by raising the debt ceiling.
Continue reading "How the Nation Resolved Its First Debt Ceiling Crisis " »
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