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How Much Debt Is Too Much? What History Shows
The U.K. had relatively high levels of public debt in the past 300 years, with its debt-to-GDP ratio exceeding 200% at times.
Journal Article
The Rise and Decline of Petersburg, Va.
Early Virginians looked at Petersburg, with its location on the Appomattox River, as a town of economic vibrancy and promise. Incorporated in 1748 by the Virginia General Assembly, the town fulfilled that early promise and grew to become the commonwealth's third independent city in 1850. But turmoil as well as prosperity for Petersburg were ahead. {{p}} Throughout its 270 years, three factors have dominated Petersburg's economic history: tobacco, trade, and transportation. The city's early economic prominence was due to its tobacco plantations and warehouses as well as various mills powered ...
Journal Article
From Ye Olde Stagnation to Modern Growth in England
Modern economic growth is a relatively recent phenomenon in history, but what led economies out of stagnation?
Working Paper
The Evolving Core of Usable Macroeconomics for Policymakers
We provide a brief primer on how the core of usable macroeconomic theory for monetary policymakers has evolved over the past 50 years. Today’s policy discussions center on the New Keynesian (NK) synthesis, which builds on the Neoclassical growth model and the AS-AD framework. It incorporates nominal and real rigidities, financial and labor market frictions, the importance of expectations, and inspired terms used by policymakers such as “anchored inflation expectations” and “forward guidance.” While essential for communication during the Great Recession and Covid-19 pandemic, these ...
Newsletter
Fruit of the Boom: The Impact of the Industrial Revolution on Economic Growth
This article uses the history of the Industrial Revolution to highlight economic growth in eighteenth century England.
The COVID-19 Recession in Historical Perspective
How severe is the COVID-19 recession across the globe? An analysis compares GDP growth forecasts for 2020 with historical growth rates for 155 countries.
Newsletter
Marginal Product of Labor and U.S. Westward Expansion
History and economic concepts explain the westward migration of the U.S. population in the early nineteenth century.
Working Paper
A margin call gone wrong: Credit, stock prices, and Germany's Black Friday 1927
Leverage is often seen as villain in financial crises. Sudden deleveraging may lead to fire sales and price pressure when asset demand is downward-sloping. This paper looks at the effects of changes in leverage on asset prices. It provides a historical case study where a large, well-identified shock to margin credit disrupted the German stock market. In May 1927, the German central bank forced banks to cut margin lending to their clients. However, this shock affected banks differentially; the magnitude of credit change differed across banks. Using the strong connections between banks and ...
Journal Article
A Short History of Long-Term Mortgages
Americans take today's selection of mortgages for granted, but financing a home is a much different experience than it was a century ago.
Journal Article
When Banking Was 'Free'
From 1837 until the Civil War, currency issuance and banking were left to the states. Can this era offer lessons for today's cryptocurrency boom?