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Working Paper
What is Certain about Uncertainty?
Researchers, policymakers, and market participants have become increasingly focused on the effects of uncertainty and risk on financial market and economic outcomes. This paper provides a comprehensive survey of the many existing measures of risk, uncertainty, and volatility. It summarizes what these measures capture, how they are constructed, and their effects, paying particular attention to large uncertainty spikes, such as those appearing concurrently with the outbreak of COVID-19. The measures are divided into three types: (1) news-based, survey- based, and econometric; (2) asset market ...
Speech
Exploring current economic conditions and the implications for monetary policy: remarks at the National Association for Business Economics (NABE) 60th Annual Meeting, Boston, Massachusetts, October 1, 2018
While inflation remains well contained to date, pushing the economy too hard risks inflationary concerns or financial-stability risks. Either of these outcomes might necessitate a more forceful monetary policy response. While a more forceful policy might be appropriate under such conditions, it is not a risk-free strategy and could put at risk the continued expansion. The history of rapid rate increases in the U.S. suggests that such a risk is real, and as a result my preference for a strategy that allows a continued, but gradual, pace of monetary tightening.
Working Paper
How ETFs Amplify the Global Financial Cycle in Emerging Markets
This paper examines how the growth of exchange-traded funds (ETFs) has affected the sensitivity of international capital flows to global financial conditions. Using data on individual emerging market funds worldwide, we employ a novel identification strategy that controls for unobservable time-varying economic conditions at the investment destination. We find that the sensitivity of flows to global financial conditions for equity (bond) ETFs is 2.5 (2.25) times higher than for equity (bond) mutual funds. We then show that our findings have macroeconomic implications. In countries where ETFs ...
Speech
Exploring current economic conditions and the implications for monetary policy: remarks at 1Berkshire Economic Outlook Luncheon, Dalton, Massachusetts, October 26, 2018
Topics covered include: recent monetary policy actions; outlook -- continued robust growth; clear risks to the forecast; how should policy respond to strong base forecast but rising risks?; inflation for goods and services; exports are important and uncertain.