Will the freezing of the Bank of Russia’s foreign exchange reserves undermine the dollar’s predominant role in official foreign exchange reserves? This column examines the aggregate evidence since end-2021 for any reduction in the dollar share of official foreign exchange reserves against a baseline constructed with data from 1999 through 2021. The observed dollar share […]
Artificial intelligence can act to either stabilise the financial system or to increase the frequency and severity of financial crises. This second column in a two-part series argues that the way things turn out may depend on how the financial authorities choose to engage with AI. The authorities are at a considerable disadvantage because private-sector […]
Housing is at the core of economics. It represents most households’ largest asset, and rent similarly accounts for a significant portion of inflation indexes as a major household expenditure. This column uses data from the Historical Housing Prices Project to produce a nationwide index for US house prices spanning the period 1890 to 2006. The […]
The US-China relationship is arguably the most important bilateral relationship of the 21st century. This column explores the link between trade imbalance and US sentiment toward China, and shows that US communities more exposed to import competition from China experienced a greater deterioration in sentiment. The trade-induced US sentiment toward China is broad-based, encompassing political, […]
Based on recent projections, the US federal debt is expected to grow to historic highs over the next decade. This column uses the FRB-US model to simulate fiscal scenarios for the US. Across all fiscal consolidations considered, the debt/GDP ratio and interest bill increase at least until 2026-2027. Growth is not a way out: without […]
The rapid adoption of artificial intelligence is transforming the financial industry. This first of a two-column series argues that AI may either increase systemic financial risk or act to stabilise the system, depending on endogenous responses, strategic complementarities, the severity of events it faces, and the objectives it is given. Stress that might have taken […]
Floods are becoming more common and costly as a result of climate change. This column uses localised data from three European countries to identify the financial impact of flooding on small and medium-sized enterprises, an important channel beyond the immediate impact on physical capital. The authors find that flood risk increases lending costs for such […]
To combat the Great Recession following the 2008 financial crisis and the more recent pandemic recession, central banks around the world purchased unprecedented quantities of securities. This column shows that central bank asset purchases by the ECB have a smaller effect on securities held by price-elastic investors (e.g. mutual funds, banks) and securities the ECB […]
Faculty mobility has been a hallmark of universities since their inception. The connections forged between distant campuses has facilitated the exchange of manuscripts and students, nurturing academic productivity and the spread of ideas. This column surveys the academic landscape in Europe from 1000 to 1793, focusing in particular on how the Protestant Reformation affected the […]
The US aims to revitalise its domestic semiconductor manufacturing industry, but will there be enough skilled workers to meet the ambitious goals? This column presents evidence, based on a global dataset of 1.6 million employees with chip manufacturing skills, that US protectionist policies – increased tariffs and visa restrictions – implemented since 2018 may have […]
