Demand shocks can have permanent impact on US economy – Fed paper
Authors find hysteresis is an important driver of longer-term growth trend in US
Demand shocks can permanently alter the course of growth in the US, research published by the Federal Reserve finds.
Authors Francesco Furlanetto et al question the “traditional view” that demand shocks have only a temporary impact on the long-run growth trend.
The working paper is based on macroeconomic indicators for the US from 1983 to 2019. The authors test for the effects of a supply shock and a “more novel demand shock”.
“We find that demand shocks with potentially permanent effects do
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@centralbanking.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@centralbanking.com
More on Macroeconomics
US news has a large impact on global bond yields – research
Bank of Canada research finds US news affects expectations in other countries
Generative AI’s impact on inflation unclear – BIS study
Inflation could worsen if people anticipate jump in productivity, authors say
Low growth threatens to reverse living standards – IMF
AI will drive growth but also increase inequalities, fund says
Long-term inflationary pressure set to rise, research finds
Changed environment makes central banks’ task harder, Kenneth Rogoff and other researchers say
Dallas Fed analysis explains puzzle of strong US economy
Authors say US has enjoyed favourable supply-side conditions that others missed out on
IMF chief urges China to adopt pro-market reforms
Comprehensive reforms could add $3.5 trillion to economy over next 15 years, Georgieva says
New study finds uneven impact of changing energy costs
Energy prices more likely to affect product prices than wage increases
BIS research points to ‘slower disinflation ahead’
Breakdown of post-Covid surge finds services prices playing bigger role
Most read
- ECB says iPhone is currently incompatible with digital euro
- Supervisors grapple with the smaller bank dilemma
- ‘Do I die, or do I survive?’ Officials reflect on Basel III complexity