Business Cycles | Econofact

Responsiveness of the Safety Net During Downturns: Lessons from the Great Recession

By Marianne Bitler·October 28, 2019
University of California, Davis

The Issue:

During economic downturns the social safety net can play a critical role for families as well as for the economy more broadly. Social programs can protect vulnerable families by making it easier for them to continue to meet basic needs. The social safety net can also act as a fiscal stimulus — increasing

Why Is Inflation so Low?

By Dan Sichel·October 8, 2019
Wellesley College

The Issue:

Inflation has averaged just over 1-1/2 percent over the past decade, well below the Federal Reserve’s target of 2 percent. Such low inflation for such an extended stretch is quite unusual given historical economic relationships. With the current unemployment rate near historic lows, the persistent soft

How Low Can We Go? Prospects for Negative Interest Rates

By Kenneth Kuttner·September 17, 2019
Williams College

The Issue:

There is increasing speculation regarding whether the Federal Reserve might set a negative target for the federal funds rate should the economy enter a recession. If it did, the Fed would not be the first central bank to do so. Although negative policy rates have been rare until recently, the European

What Can the Employment Report Tell Us?

By Karen Dynan and Miriam Wasserman·September 2, 2019
Harvard University and EconoFact

The Issue:

Slowing growth abroad, particularly in Germany and China, as well as ongoing trade disputes have spurred much recent discussion about the extent to which these factors might hurt the American economy. But how can we gauge how these factors and other developments are reverberating across the U.S. economy?

Fed Policy: Is it Time to Take Away the Punch Bowl? (UPDATE)

By Kenneth Kuttner·July 30, 2019
Williams College

The Issue:

The Federal Reserve kept interest rates low (and took extraordinary expansionary actions) in response to the financial and economic crisis that began in the autumn of 2008. Beginning in December 2015, as the recovery gained traction, the Fed began gradually raising the federal funds rate, the interest

What Information Does the Yield Curve Yield? (UPDATED)

By Michael Klein·December 6, 2018
Fletcher School, Tufts University

The Issue:

Forecasting the twists and turns of the economy is difficult. One set of indicators used to gauge where the economy is headed draws on information from financial markets since the yields paid by financial assets reflect the collective market view of the future state of the economy. An inverted yield ...
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