New paper with Paul Beaudry (UBC Economics) and Paolo Cavallino (Bank for International Settlements). In it, we argue that monetary policy may be driving secular trends in real interest rates because very persistent rate changes have only weak effects on activity [1/7]

🎢The roller coaster paper is conditionally accepted at the American Economic Journal: Macroeconomics. Our point: the inflation surge is mainly demand-driven and check carefully the deterministic component of your SVAR Drago Bergholt Nicolò Maffei-Faccioli Pål Bergset Ulvedal and 👑Fabio Canova🎢

A non-technical explanation of the difference between Risk and Uncertainty philadelphiafed.org/-/media/frbp/a… And this is a survey (technical) on the impact of uncertainty on the macroeconomy nber.org/papers/w26768 Visit my website for lectures on uncertainty sites.google.com/site/pabloague…

We have developed 𝗠𝗜𝗟𝗔 (𝗠𝗼𝗻𝗲𝘁𝗮𝗿𝘆-𝗜𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝘁 𝗟𝗮𝗻𝗴𝘂𝗮𝗴𝗲 𝗔𝗴𝗲𝗻𝘁) - an AI tool designed to evaluate ECB communication, assessing individual sentences from monetary policy statements and speeches given both in-document and the macro context. \1

Macro had it's own version of the "DiD practitioner's guide" come out recently -- definitely check it out

Do households actually adjust their consumption in response to interest rate changes? Using 10 macro shocks, this #FEDSPaper finds no evidence that households substitute intertemporally. Instead, income expectations explain almost all consumption responses federalreserve.gov/econres/feds/d…

Very insightful! "The Four R-stars: From Interest Rates to Inflation and Back" by Ricardo Reis "R-star is a useful benchmark for the real interest rate. Sometimes, it refers to the steady-state equilibrium rate where savings equal investment (m), other times to the long-run

I am very happy that this project finally came out as a FedResearch working paper. In the following, I provide a summary of the paper which might be of interest to you if you work on anything related to asset pricing and macroeconomics. Paper: federalreserve.gov/econres/feds/h… 1/16

Introducing the Stripe Economics of AI Fellowship: The economics of AI remains surprisingly understudied. The fellowship aims to help fill that gap, by supporting grad students and early-career researchers with $, data, a conference, and community –

Deep learning (DL) is proving remarkably effective at solving dynamic models in economics: 📄 nber.org/papers/w33117 Curiously, DL often yields stable solutions without explicitly imposing boundary conditions (e.g., transversality). Why does this work? A short thread 🧵👇 1/7

🚨Paper🚨 "Scalable Global Solution Techniques for High-Dimensional Models in Dynare" (papers.ssrn.com/sol3/papers.cf…), code: https://nvls. co/Dynare/GlobalMethods/SparseGrids (@HECLausanneEconwith N. Rion DynareTeam Michel Juillard Banque de France Aryan Eftekhari)

Olivier Blanchard argues that we should understand better the macroeconomics of the medium run, and I could not agree more. Since I have been working on this for a while, let me show you why this is a promising field for young researchers!

highly recommend

A great point by Tom. These estimates, by themselves, do not take into account GE effects. I’d be remiss, however, if I didn’t mention some recent work of mine with Naoya Nagasaka and Felipe Schwartzman that shows how these results can be leveraged

SOFR actually printed above IOR yesterday and it wasn't a period-end date. Looks like there really was some funding pressure building up. ht Amit Noam Tal

I’m thrilled to share that our paper will finally be published in 𝐓𝐡𝐞 𝐑𝐞𝐯𝐢𝐞𝐰 𝐨𝐟 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐒𝐭𝐮𝐝𝐢𝐞𝐬! Huge thanks to editor Kurt MIT-shock-man and the three anonymous referees for giving us a chance and helping us improve the paper along the way. Thread👇 1/17

The increase in uncertainty and asset volatility can propagate to the real economy, amplifying the direct effects of policies on productivity. "Heterogeneous Beliefs, Asset Prices, and Business Cycles" with Dejanir Silva & Eduardo Zilberman, may be useful to understand how. 🧵 Thread 👇

Great way to frame an important friction to diffusion. At the same time, I'd bet before too long models we currently consider to be quite good will be very cheap, which means you can have a small army of AI agents checking details that'll be on par with a single, careful human

Joe Weisenthal According to Jarocinski and Karadi, when that hypothetical 50 bp surprise cut (MP shock) hits the tape, your first question should be: Is the S&P flying or tanking? That tells you how much of the move in the long bond will stick once the dust settles.

Exciting times