During the pandemic, annual CPI inflation in the US rose sharply to a peak of 9% in June 2022. This column argues that the rise of inflation can be explained with a framework in which inflation depends on three factors: long-term expectations, the tightness of the labour market as measured by the vacancy-to-unemployment ratio, and […]
The conventional wisdom is that uncertainty leads to economic contractions, but recent evidence challenges this assumption. This column introduces two novel concepts of uncertainty – agreed and disagreed uncertainty. It shows that when uncertainty is accompanied by widespread consumer disagreement about economic conditions (disagreed uncertainty), the economy remains stable despite the elevated uncertainty. In contrast, […]
21 Apr 2025 Safe assets are the building blocks of modern financial markets. This column examines the sectoral dynamics of safe assets across advanced economies since the 1980s. It shows that foreign demand for these assets has steadily increased, with the financial sector playing a key role in meeting it. However, because financial institutions often […]
