Inﬂation Expectations and Recovery from the Depression in 1933: Evidence from the Narrative Record, 2016
with Andrew Jalil.
[download PDF] [SSRN] [FEDS WP2015-29] [BEHL WP2015-04]
Abstract: This paper uses the historical narrative record to determine whether inflation expectations shifted during the second quarter of 1933, precisely as the recovery from the Great Depression took hold. First, by examining the historical news record and the forecasts of contemporary business analysts, we show that inflation expectations increased dramatically. Second, using an event-studies approach, we identify the impact on financial markets of the key events that shifted inflation expectations. Third, we gather new evidence—both quantitative and narrative—that indicates that the shift in inflation expectations played a causal role in stimulating the recovery.
Media/Internet coverage: [Mark Thoma] [Marcus Nunes] [Brad DeLong] [David Glasner (1)] [Lars Christensen] [David Glasner (2)] [Nobel laureate Christopher Sims] [Narayana Kocherlakota]
The Local Impact of Containerization, 2016
with Leah Brooks and Nicolas Gendron-Carrier
[paper coming soon]
Diffusion of Containerization, 2014
[FEDS WP2014-88] [FREIT WP2012-521] [diffusion slideshow]
Abstract: This paper uses a newly constructed, comprehensive dataset to investigate the diffusion of containerization. The data show that country adoption is exceptionally fast while firm usage increases more slowly. To guide my empirical investigation, I build a multi-country trade model with endogenous adoption of a new transportation technology that is consistent with these facts. I then test empirically the predictions of the model and find that: (1) usage of containerization increases with firms' fixed costs and the size and average income of the container network; and (2) adoption depends on expected future usage, adoption costs, and trade with the United States, the first and largest user of containerization.
Exchange Rates and Global Rebalancing, 2015
In Barry P. Bosworth and Masahiro Kawai (eds.), Transpacific Rebalancing: Implications for Trade and Economic Growth. Brookings Institution Press and Asian Development Bank Institute.
with Barry Eichengreen.
[link to book] [download PDF] [ADBI WP2011-278]
Abstract: This paper considers the general equilibrium relationship between exchange rates and global imbalances. It emphasizes that the exchange rate is not a primitive but an equilibrium price determined by the policy mix. It uses extensions of the two-country Obstfeld-Rogoff model to analyze the response of imbalances and real exchange rates to shocks. Finally it analyzes the characteristics of episodes in which chronic current account surpluses (as opposed to deficits) come to an end.
From Great Depression to Great Credit Crisis: Similarities, Differences and Lessons, 2010
Economic Policy, 62 (April 2010), 219-265.
with Miguel Almunia, Agustín Bénétrix, Barry Eichengreen, and Kevin O'Rourke.
[link to journal] [VoxEU article] [NBER WP15524] [CEPR DP7564] [IIIS DP303]
Abstract: The Great Depression of the 1930s and the Great Credit Crisis of the 2000s had similar causes but elicited strikingly different policy responses. It may still be too early to assess the effectiveness of current policy responses, but it is possible to analyze monetary and fiscal policies in the 1930s as a “natural experiment” or “counterfactual” capable of shedding light on the impact of recent policies. We employ vector autoregressions, instrumental variables, and qualitative evidence for a panel of 27 countries in the period 1925-1939. The results suggest that monetary and fiscal stimulus was effective – that where it did not make a difference it was not tried. The results also shed light on the debate over fiscal multipliers in episodes of financial crisis. They are consistent with multipliers at the higher end of those estimated in the recent literature, consistent with the idea that the impact of fiscal stimulus will be greater when banking system are dysfunctional and monetary policy is constrained by the zero bound.
History of the Federal Reserve Board Statistical Releases, 2016
FEDS Notes.Washington: Board of Governors of the Federal Reserve System, March 4, 2016.
with Sian L. Seldin.
[link to Feds Note]
Abstract: Soon after the creation of the Federal Reserve System in 1913, the Board of Governors started publishing extensive statistical data on the United States economy and its banking system. This early statistical work, which preceded the U.S. national accounts, has continued through today. In this note, we describe the history of the Federal Reserve Board statistical publications presented in FEDS Paper 2016-016.
Review of Steven C. Topik and Allen Wells "Global Markets Transformed: 1870–1945," 2015
The Journal of Economic History, 75, pp 615-617.
[link to journal]