The FOMC meets this week, and most expect them to continue to taper their purchases of longer term MBS and Treasuries at a slow pace. Of course, there could be a surprise around the corner. If there is a surprise, what assets are likely to be affected? And why? The second question is challenging–it has …
In November 1930, before anyone knew how Great the Depression would be, Charles Persons published an article in the Quarterly Journal of Economics called “Credit Expansion, 1920 to 1929, and Its Lessons.” His thesis was stated forcefully in the first paragraph: “The thesis of this paper is that the existing depression was due essentially to …
February retail sales are out Thursday. The debate has been raging on whether weak spending this winter can be blamed on the brutal weather. We may have some thoughts on this precise question in a post later this week. But for now, given that one of us lives in Chiberia, we thought we would show …
Our initial blog post on Friday made the argument that the housing market rebound was driven primarily by investors buying up foreclosed properties. As a result, we should not expect it to fuel household spending as we saw before. Two articles out today make arguments that are closely related: home building is shifting toward rental apartments and …
The Federal Reserve has a well-defined dual-mandate: stabilize prices and maximize employment. However, in trying to achieve these objectives, the Fed can inadvertently favor some segments of the population more than others. This was indeed the case from the perspective of households’ net worth position during the Great Recession. We have already highlighted the highly unequal distribution …
Just how bad was the housing binge from 2002 to 2006? Here is retail spending on furniture, appliances, and home improvement from 2006 to 2013. The lines are indexed to 2006, so for every year, if you take the point for that year and subtract 100 you get the percentage change from 2006 to that …
