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Journal Article
A look inside two central banks: the European Central Bank and the Federal Reserve
In 1998 the European Central Bank (ECB) became the world?s 173rd central bank. The Eurosystem, with its structure of national central banks and the ECB, is similar to the Federal Reserve System, with its District Banks and Board of Governors. However, important differences exist in the way the two systems operate. This article compares the organization and tasks of the two central banks by examining differences in their monetary policy frameworks, specifically focusing on the goals, tools, and policymaking process. In addition it examines the independence, accountability, and transparency of ...
Journal Article
Trade between the United States and Eastern Europe
Journal Article
What drives large current account deficits?
Journal Article
Import prices and the exchange rate
Journal Article
Going down: the Asian crisis and U.S. exports
The Asian financial and economic crisis has attracted much attention to the trade links among the United States and countries throughout Asia. Until the crisis, U.S. exports to East Asia were growing rapidly. In this article, Patricia S. Pollard and Cletus C. Coughlin examine the abrupt decline in exports and provide estimates of the sizes of the export shock both to the U.S. economy as a whole and to specific sectors. More than half the industries they studied experienced declines in exports to East Asia of more than 15 percent; however, focusing solely on the export data overstates the ...
Working Paper
Pass-through estimates and the choice of an exchange rate index
We examine exchange rate pass-through into U.S. import prices in 29 manufacturing industries using eight exchange rate indexes. These indexes vary by the number currencies included; whether the weight on each currency is based on total trade with the United States or solely imports; and, whether the weights vary by industry. Our results indicate that pass-through is generally incomplete but varies across industries. Moreover, pass-through is sensitive to the exchange rate index. Using bootstrapped J tests we show that major currency indexes perform better than their broad currency ...
Working Paper
Size matters: asymmetric exchange rate pass-through at the industry level
Changes in costs faced by firms have direct implications for their price-cost margins. Knowing how prices respond to such cost changes is crucial for understanding how individual markets function and, in turn, for understanding the macroeconomy. We analyze exchange rate pass-through into U.S. import prices for 30 industries to address two questions related to this issue. First, does the direction of a change in the exchange rate affect pass-through? Second, does the size of a change in the exchange rate matter for pass-through? We find that firms in over half the industries studied respond ...
Working Paper
The role of the euro as an international currency
The creation of the euro will link an economy that is nearly as large and as open as the United States. Does this imply that the euro will rival the role of the dollar as an international currency? This paper addresses this question through an examination of the determinants of the use of an international currency. It examines both the prospects of the euro becoming an international currency and the implications for the European Union and the United States.
Working Paper
The transition from a-pay-as-you-go to a fully-funded Social Security System: is there a role for social insurance?
This paper develops a model to examine the effects of introducing a fully-funded government sponsored pension plan into an overlapping generations model with an extant pay-as-you-go social security system. We examine whether individual and social welfare can be improved by phasing out the current pay-as-you-go system and replacing it with a fully-funded system in which pension benefits are at least partially annuitized. Furthermore, we consider the effects of means testing social security benefits and providing a income guarantee funded in a pay-as-you-go manner. We find that the presence of ...