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Our most academic publication offers research and surveys on monetary policy, national and international developments, banking, and more. The content is written for an economically informed readership—from the undergraduate student to the PhD.

Published: Mon, 12 Sep 2016 00:00:00 CDT

Last Build Date: Mon, 12 Sep 2016 00:00:00 CDT

Copyright: Copyright 2016 Federal Reserve Bank of St. Louis

Sales of Distressed Residential Property: What Have We Learned from Recent Research? by Jeffrey P. Cohen, Cletus C. Coughlin, and Vincent W. Yao


During the housing bust many homeowners found themselves “underwater”—the amount they owed on their mortgages exceeded the value of the associated property—and they either could not or possibly chose not to stay current on their mortgage payments. As a consequence, sales of so-called distressed properties, often after a foreclosure, became commonplace.

The Visible Hand: The Role of Government in China’s Long-Awaited Industrial Revolution by Yi Wen and George E. Fortier


One of the key strategies behind the creation and nurturing of a continually growing market in China is based on this premise: The free market is a public good that is very costly for nations to create and support. Market creation requires a powerful “mercantilist” state and the correct sequence of developmental stages; China has been successfully accomplishing its industrialization through these stages, backed by measured, targeted reforms and direct participation from its central and local governments.

A Taylor Rule for Public Debt by Costas Azariadis


Public debt is an important source of liquidity in economies facing shortages of private credit. It is also a bubble whose current price depends on expectations of what it will buy at future dates.

Monetary Policy in an Oil-Exporting Economy by Franz Hamann, Jesús Bejarano, Diego Rodríguez, and Paulina Restrepo-Echavarria


The sudden collapse of oil prices poses a challenge to inflation-targeting central banks in oil-exporting economies. In this article, the authors illustrate this challenge and conduct a quantitative assessment of the impact of changes in oil prices in a small open economy in which oil represents an important fraction of its exports.

Permazero by James Bullard


The financial crisis of 2007-09 and its aftermath turned monetary economics and policymaking on its head and called into question many of the conventional views held before the crisis. One of the most popular and enduring views in all of monetary economics since the 1970s, and indeed since the 1940s, has been that a nominal interest rate peg is poor monetary policy and that attempts to pursue such a policy would lead to ruin.

Secular Stagnation and Monetary Policy by Lawrence H. Summers


This article is based on the author’s Homer Jones Memorial Lecture delivered at the Federal Reserve Bank of St. Louis, April 6, 2016.

Market Power and Asset Contractibility in Dynamic Insurance Contracts by Alexander K. Karaivanov and Fernando M. Martin


The authors study the roles of asset contractibility, market power, and rate of return differentials in dynamic insurance when the contracting parties have limited commitment. They define, characterize, and compute Markov-perfect risk-sharing contracts with bargaining.

Student Loans Under the Risk of Youth Unemployment by Alexander Monge-Naranjo


While most college graduates eventually find jobs that match their qualifications, the possibility of long spells of unemployment and/or underemployment—combined with ensuing difficulties in repaying student loans—may limit and even dissuade productive investments in human capital. The author explores the optimal design of student loans when young college graduates can be unemployed and reaches three main conclusions.

Three Challenges to Central Bank Orthodoxy by James Bullard and Kevin L. Kliesen


Since 2007-09, the Federal Reserve has pursued an aggressive monetary policy strategy associated with healthy labor market conditions, moderate economic growth, and inflation close to the FOMC’s 2 percent target.

A Regional Look at U.S. International Trade by Maximiliano A. Dvorkin and Hannah Shell


Economic activity at the state level varies greatly across U.S. regions, with different states specializing in the production of particular goods and services. This heterogeneity in activity informs the geographic distribution of U.S. imports and exports.

Relative Income Traps by Maria A. Arias and Yi Wen


Despite economic growth in the post-World War II period, few developing countries have been able to catch up to the income levels in the United States or other advanced economies. Such countries remain trapped at a relative low- or middle-income level.

Aging and Wealth Inequality in a Neoclassical Growth Model by Guillaume Vandenbroucke


In this article, the author uses a version of the neoclassical growth model with overlapping generations of individuals to investigate the effect of aging on wealth inequality.