Economic Commentary
Providing you with in-depth analysis of current economic and financial issues.
1989
- December 15, 1989
- Making Judgments About Mortgage Lending Patterns
- A discussion of discrepancies in methods of evaluating evidence on mortgage-lending discrimination in minority and low-income areas, outlining fundamental differences between studies that focus mostly on neighborhood characteristics and regulatory-agency compliance examinations that concentrate on the attributes of individual lenders. (PDF)
- December 1, 1989
- Monetary Policy and the M2 Target
- An analysis of the Federal Reserve’s use of the M2 monetary aggregate as both a short-term and long-term policy guide, asserting that the FOMC’s tentative target range for M2 growth in 1990 permits ample opportunity for the inflation rate to either accelerate or decline during the next few years. (PDF)
- November 15, 1989
- How Soft a Landing?
- A summation of the outlook of 30 economists at the October 20, 1989 meeting of the Fourth District Economists’ Roundtable, with major emphasis on the inflation outlook, GNP growth, and capital spending. (PDF)
- November 1, 1989
- Foreign Capital Inflows: Another Trojan Horse?
- An analysis of the role of foreign investment in U.S. resource allocation, finding that the large influx of foreign capital in the 1980s has been used predominantly to fund domestic investment and consumer investment spending. (PDF)
- October 15, 1989
- Breaking the Inflation-Recession Cycle
- A discussion of recessions, caused by inflationary monetary policies as well as nonmonetary surprises, and a prescription for attaining maximum sustainable economic growth. (PDF)
- October 1, 1989
- Forecasting Turning Points With Leading Indicators
- An examination of the Composite Index of Leading Indicators and its record as a forecasting tool. The authors conclude that while the index can provide useful information about business peaks and troughs, its value is limited by a tendency to give false signals, and its worth greatly increases when used in combination with other indexes. (PDF)
- September 15, 1989
- The Indicator P-Star: Just What Does it Indicate?
- An explanation of P-Star, evaluating its usefulness both as an indicator of potential inflation and as a method of assessing the Federal Reserve’s long-term goal of price stability. (PDF)
- September 1, 1989
- Have the Characteristics of High-Earning Banks Changed? Evidence from Ohio
- An analysis of the effects of deregulation on the earnings of Ohio banks in the last decade, finding that the top-performing financial institutions earned even higher returns on assets after deregulation, while the earnings of poorly managed banks deteriorated. (PDF)
- August 15, 1989
- LBOs and Conflict of Interest
- A discussion of leveraged buyouts and their dramatic impact on traditional corporate structure and relationships among stockholders, bondholders, and employees. (PDF)
- August 1, 1989
- Mergers, Acquisitions and Evolution of the Region’s Corporations
- An examination of the effect of mergers and acquisitions on the Fourth Federal Reserve District economy during the past three decades, using data from 37 companies in Cleveland, Cincinnati, and Pittsburgh. (PDF)
- July 15, 1989
- Setting the Discount Rate
- An analysis of the rationale for using the discount rate as an independent monetary policy tool (rather than simply moving the rate in alignment with market rates) so that the Federal Reserve can improve the reliability of short-term policy information and prevent market activity based on inaccurate assumptions about policy intentions. (PDF)
- July 1, 1989
- Inflation and Soft Landing Prospects
- A presentation of the outlook for the economy through 1990 by discussants at the Fourth District Economists’ Roundtable meeting at the Federal Reserve Bank of Cleveland. (PDF)
- June 15, 1989
- Payment System Risk Issues
- A discussion of international, domestic, pricing, and operational aspects of electronic payment system risk, with a description of proposals for managing the risk and for reducing Federal Reserve exposure. (PDF)
- June 1, 1989
- Rethinking the Regulatory Response to Risk-Taking in Banking
- A perspective on regulatory reform of the financial industry, focusing on the need to revamp the deposit-insurance system and recommending greater reliance on market forces, less reliance on the regulatory apparatus, and the retention of the current framework of multiple regulatory agencies. (PDF)
- May 15, 1989
- Economic Principles and Deposit-Insurance Reform
- A discussion of the fundamental economic principles to consider in evaluating proposals to reform the current system of federal deposit insurance. (PDF)
- May 1, 1989
- Airline Deregulation: Boon or Bust?
- An examination of the benefits and problems that have resulted from deregulation of the airline industry, with recommendations for public policy changes to preserve the benefits and to mitigate the problems. (PDF)
- April 15, 1989
- Communication and the Humphrey-Hawkins Process
- A discussion of the February 1989 Humphrey-Hawkins testimony by Federal Reserve Chairman Greenspan, with suggestions for using the process to better communicate the monetary policy objectives of the Federal Reserve. (PDF)
- April 1, 1989
- A Market-Based View of European Monetary Union
- A discussion of European economic integration, noting that monetary union is of secondary importance to free markets in pushing Europe toward its economic potential. (PDF)
- March 15, 1989
- Is There a Message in the Yield Curve?
- An examination of the indicator value of the yield curve, concluding that its message is no more distinct than those received from other intermediate indicators. (PDF)
- March 1, 1989
- The Costs of Default and International Lending
- An examination of the costs and benefits of LDC external debt default, with a discussion of the implications for the future of international lending. (PDF)
- February 15, 1989
- Bank Lending to LBO’s: Risks and Supervisory Response
- An examination of the risks associated with leveraged buyouts and a discussion of the current response of federal bank regulators to the increased participation of banks and bank holding companies in funding LBOs, stressing the need for appropriate internal controls. (PDF)
- February 1, 1989
- Monetary Policy, Information, and Price Stability
- A discussion of the pernicious effects of inflation on U.S. economic efficiency and a recommendation that the Federal Reserve should move toward its goal of price stability through an information program stating its goals, methods, and timetables for achieving zero inflation. (PDF)
- January 15, 1989
- Money and Velocity in the 1980s
- A discussion of how financial deregulation and disinflation affect the velocities of M1 and M2, noting implications for the conduct of monetary policy. (PDF)
- January 1, 1989
- International Policy Coordination: Can We Afford It
- A proposition that detailed global coordination of macroeconomic policies could have negative effects on real economic growth and efficiency, and that the integrity of private markets would be better assured through the maintenance of long-term nominal policy targets. (PDF)