Finance Basic To Advance Level Knowledge

Here is a great summer program for advanced undergraduate or beginning graduate student that are interested in monetary economics. Scott Sumner and I will be presenters and St. Louis Fed President Jim Bullard will be the keynote speaker. Your travel and lodging will be covered, but you need to apply by January 31.  Alternative Money University (AMU) is an academic workshop for advanced undergraduate and beginning graduate students with a particular interest in monetary economics. During three days of intensive seminars, students will learn from leading scholars in the field about subjects not typically addressed in undergraduate or graduate economics courses — including topics in monetary history, the theory and practice of monetary policy, and the workings of unconventional monetary arrangements. Between them, the subjects covered and the seminar-style of the sessions are intended to provide students with a solid foundation upon which to build their own, future contributions t...

It's Back... Over the past few months there has been increasing chatter about the need for a new framework for U.S. monetary policy. The  Peterson Institute for International Economics (PIIE), for example, recently had its Rethinking Macroeconomic Policy conference where, among other things, Ben Bernanke called for the Fed to adopt a  temporary price-level target . PIIE also launched Angel Ubide's new book   on reforming monetary policy. Similarly, at the AEA meetings there was a session titled Monetary Policy in 2018 and Beyond  where Christina Romer again made the case for a NGDP level target. Likewise, the Brookings Institute held a recent conference on whether the Fed should  abandon its 2 percent inflation target . There,  Jeff Frankel shared the arguments for a NGDP level target and Larry Summers endorsed it. Others at the conference, like San Francisco Fed President John Williams called for a price level target. I am glad this conver...

So the Federal Reserve is reporting that interest on excess reserves (IOER) payments hit $25.9 billion in 2017. This amount is more than double the dollar size of the IOER payments in 2016 as seen below.  This increase is understandable given the rise in the Fed's short-term interest rate target and the size of its balance sheet. But, as I have noted before , this is horrible optics. For the largest recipients of the IOER payments are large domestic banks and foreign banks. As seen in the figure below, they hold most of the excess reserves and therefore earn most of the IOER payments.  Put differently, the systematically-important or "too-big-to-fail" banks that were bailed out during the crisis and are still implicitly subsidized by the government as well as foreign banks are the main recipients of IOER. It gets worse. Note in the table above that the higher IOER payments are associated with declining remittances to the Treasury Department. The Fed, ...

We are replaying our special Christmas podcast. The guest are Anna Goeddeke and Laura Birg, two economists from Germany. Together they coauthored an article in Economic Inquiry titled “ Christmas Economics—a Sleigh Ride ” that surveys the literature on the economics of Christmas. We covered a number of interesting topics like the seasonal business cycle, the deadweight loss of Christmas, and charitable giving during the holidays.  Below is an excerpt from an earlier post when the episode first ran that touches on on the business cycle issues surrounding Christmas: The seasonal business cycle discussion was particularly fascinating for me. There is a literature that starts with Barksy and Miron (1989) (ungated version) that shows most of the variation in aggregate economic measures like GDP comes from seasonal fluctuations. Yet most macroeconomists, myself included, typically start our analysis with seasonally-adjusted data. Here is a Barky and Miron summarizing their fin...

From a new working paper by Janna E. Johnson, Morris M. Kleiner: Occupational licensure, one of the most significant labor market regulations in the United States, may restrict the interstate movement of workers. We analyze the interstate migration of 22 licensed occupations. Using an empirical strategy that controls for unobservable characteristics that drive long-distance moves, we find that the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations. Members of licensed occupations with national licensing exams show no evidence of limited interstate migration. Not only does this development have implications for workers, it also has macroeconomic implications. For the decline in interstate labor mobility, caused in part by occupational licensing, is making the U.S. economy less of an optimal currency area. From an earlier post : So why does the decline in labor mo...

I recently had Bill Barnett on my podcast to discuss his work on Divisia monetary aggregates. Below the fold is a tweetstorm by Josh Hendrickson on why we should care about this work. [ View the story "Why You Should Care about Divisia Monetary Aggregates: Josh Hendrickson Edition" on Storify ]

Doug Irwin's new book on the history of U.S. trade policy, Clashing Over Commerce , is now available for purchase . You may recall that I interviewed him about the book in this recent podcast . The podcast is embedded below. My colleague Dan Griswold has a nice review of the book over at National Review.  I learned a lot from the book and my conversation with Doug. I highly recommend it.