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168 posts on "Macroecon"

September 30, 2019

The New York Fed DSGE Model Forecast—September 2019



This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since June 2019. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.

Continue reading "The New York Fed DSGE Model Forecast—September 2019" »

Posted by Blog Author at 7:00 AM in DSGE, Forecasting, Macroecon | Permalink | Comments (0)

August 21, 2019

Online Estimation of DSGE Models



The estimation of dynamic stochastic general equilibrium (DSGE) models is a computationally demanding task. As these models change to address new challenges (such as household and firm heterogeneity, the lower bound on nominal interest rates, and occasionally binding financial constraints), they become even more complex and difficult to estimate—so much so that current estimation procedures are no longer up to the task. This post discusses a new technique for estimating these models which belongs to the class of sequential Monte Carlo (SMC) algorithms, an approach we employ to estimate the New York Fed DSGE model. To learn more, check out this paper of ours.

Continue reading "Online Estimation of DSGE Models" »

Posted by Blog Author at 7:00 AM in DSGE, Macroecon | Permalink | Comments (0)

June 21, 2019

The New York Fed DSGE Model Forecast—June 2019



This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since January 2019. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.

Continue reading "The New York Fed DSGE Model Forecast—June 2019" »

Posted by Blog Author at 7:00 AM in DSGE, Forecasting, Macroecon | Permalink | Comments (0)

May 20, 2019

How Has Germany’s Economy Been Affected by the Recent Surge in Immigration?



How Has Germany’s Economy Been Affected by the Recent Surge in Immigration?

Germany emerged as a leading destination for immigration around 2011, as the country’s labor market improved while unemployment climbed elsewhere in the European Union. A second wave began in 2015, with refugees from the Middle East adding to already heavy inflows from Eastern Europe. The demographic consequences of the surge in immigration include a renewed rise in Germany’s population and the stabilization of the country’s median age. The macroeconomic consequences are hard to measure but look promising, since per capita income growth has held up and unemployment has declined. Data on labor-market outcomes specific to immigrants are similarly favorable through 2015, but reveal challenges in how well the economy is adjusting to the second immigration wave.

Continue reading "How Has Germany’s Economy Been Affected by the Recent Surge in Immigration?" »

April 05, 2019

Just Released: The New York Fed Staff Forecast—April 2019



Today, the Federal Reserve Bank of New York is hosting the spring meeting of its Economic Advisory Panel (EAP). As has become the custom at this meeting, the New York Fed Research staff is presenting its forecast for U.S. growth, inflation, and the unemployment rate. Following the presentation, members of the EAP, which consists of leading economists in academia and the private sector, are asked to critique the staff forecast. Such feedback helps the staff evaluate the assumptions and reasoning underlying its forecast as well as the forecast’s key risks. The feedback is also an important part of the forecasting process because it informs the staff’s discussions with New York Fed President John Williams about economic conditions. In that same spirit, we are sharing a short summary of the staff forecast in this post; for more detail, see the New York Fed Staff Outlook Presentation from the EAP meeting on our website.

Continue reading "Just Released: The New York Fed Staff Forecast—April 2019" »

Posted by Blog Author at 10:30 AM in Forecasting, Macroecon | Permalink | Comments (0)

April 01, 2019

The Keynesian Growth Approach to Macroeconomic Policy and Productivity



The Keynesian Growth Approach to Macroeconomic Policy and Productivity

Productivity is one of the key determinants of potential output—that is, the trend level of production consistent with stable inflation. A productivity growth slowdown has occurred in several advanced economies in the aftermath of the global financial crisis, raising concerns about long-term growth. In response, a variety of supply-side policy options have been proposed, such as reforms to increase labor and product market flexibility. In this blog post, we consider the role of demand-side policies in raising trend productivity growth.

Continue reading "The Keynesian Growth Approach to Macroeconomic Policy and Productivity" »

Posted by Blog Author at 7:00 AM in Macroecon | Permalink | Comments (2)

March 27, 2019

Expecting the Unexpected: Job Losses and Household Spending



LSE_Expecting the Unexpected: Job Losses and Household Spending

Unemployment risk constitutes one of the most significant sources of uncertainty facing workers in the United States. A large body of work has carefully documented that job loss may have long-term effects on one’s career, depressing earnings by as much as 20 percent after fifteen to twenty years. Given the severity of a job loss for earnings, an important question is how much such an event affects one’s standard of living during a spell of unemployment. This blog post explores how unemployment and expectations of job loss interact to affect household spending.

Continue reading "Expecting the Unexpected: Job Losses and Household Spending" »

March 04, 2019

The Sensitivity of Long-Term Interest Rates: A Tale of Two Frequencies



LSE_The Sensitivity of Long-Term Interest Rates: A Tale of Two Frequencies

The sensitivity of long-term interest rates to short-term interest rates is a central feature of the yield curve. This post, which draws on our Staff Report, shows that long- and short-term rates co-move to a surprising extent at high frequencies (over daily or monthly periods). However, since 2000, they co-move far less at lower frequencies (over six months or a year). We discuss potential explanations for this finding and its implications for the transmission of monetary policy.

Continue reading "The Sensitivity of Long-Term Interest Rates: A Tale of Two Frequencies" »

Posted by Blog Author at 7:00 AM in Financial Markets, Macroecon, Monetary Policy | Permalink | Comments (1)

February 27, 2019

Global Trends in Interest Rates



LSE_2019_Global Trends in Interest Rates

Long-term government bond yields are at their lowest levels of the past 150 years in advanced economies. In this blog post, we argue that this low-interest-rate environment reflects secular global forces that have lowered real interest rates by about two percentage points over the past forty years. The magnitude of this decline has been nearly the same in all advanced economies, since their real interest rates have converged over this period. The key factors behind this development are an increase in demand for safety and liquidity among investors and a slowdown in global economic growth.

Continue reading "Global Trends in Interest Rates" »

February 08, 2019

The New York Fed DSGE Model Forecast—January 2019



This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since October 2018. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.

Continue reading "The New York Fed DSGE Model Forecast—January 2019" »

Posted by Blog Author at 11:00 AM in DSGE, Forecasting, Macroecon | Permalink | Comments (0)
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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.

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