Archive for April 25th, 2019

Modeling Financial Crises needs to include 4 facts

April 25, 2019

Pascal Paul in this research note (based on his bigger paper), that research on fin crises should include four empirical facts:

This Economic Letter describes four empirical facts about financial crises: (1) crises are rare, (2) they occur out of credit booms, (3) they are severe macroeconomic events, and (4) they are not necessarily the result of large shocks. Macroeconomic models of financial crises should replicate all of these features to accurately reflect what occurs around a typical crisis. The model in Paul (2019) reproduces these real-world regularities and illustrates how standard macroeconomic models can be extended to incorporate occasional financial crises. Such a framework provides a suitable laboratory for additional research that can help policymakers understand how to reduce the likelihood and the severity of future crises.

 

Janet Yellen’ journey from a Fed economist to Fed Chair…

April 25, 2019

Interview of Janet Yellen on Dallas Fed website. She holds a unique role in Fed History:

Janet Yellen holds a unique place in Federal Reserve history. In addition to being the first woman to lead the institution and chair the Federal Open Market Committee (2014 to 2018), she is also the only person to have served as a Federal Reserve bank president (at the Federal Reserve Bank of San Francisco, from 2004 to 2010), Fed Governor (from 1994 to 1997) and Vice Chair (from 2010 to 2014). It all began with a year as a humble Fed staff economist from 1977 to 1978.

For more details on Yellen’s career, read this detailed transcript as well at Federal Reserve website.


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