Quantitative Easing and the “New Normal” in Monetary Policy

My most recent paper.  Short abstract: Interest rates may remain low and fall to their effective lower bound (ELB) often. As a result, quantitative easing (QE) may complement policy approaches focused on adjustments in short-term interest rates. Simulation results suggest that QE does not improve economic performance if the steady-state interest rate is high; however, QE can offset a significant portion of the adverse effects of the ELB when the equilibrium real interest rate is low. These improvements in economic performance exceed those associated with moderate increases in the inflation target. Active QE is primarily required when nominal interest rates are near the ELB, pointing to benefits within the model from QE as a secondary tool while relying on short-term interest rates as the primary tool.


My research on “heat” in the U.S. financial system has appeared in print

Find it here.  From the abstract: We provide a framework for assessing the build-up of vulnerabilities to the U.S. financial system. We collect forty-six indicators of financial and balance-sheet conditions, cutting across measures of valuation pressures, nonfinancial borrowing, and financial-sector health. We place the data in economic categories, track their evolution, and develop an algorithmic approach to monitoring vulnerabilities that can complement the more judgmental approach of most official-sector organizations.

Sexism and discrimination in economics and how you can help fix it

The paper by Alice Wu on blatant misogyny in a blog frequented by some economists is disturbing.  Some links to relevant work and proposals for how to help: