Federal Reserve policymakers have expressed their support for ultimately shrinking the Fed’s balance sheet and returning the composition of its portfolio to only Treasury securities. Policymakers also favor returning to a fed-funds-rate-targeting procedure or something quite similar. While Fed...

An analysis of the determination of foreign investment in U.S. financial markets and suggestions for reducing dependence on foreign savings inflow.

An examination of the federal deficit and a discussion of how an increasing debt burden could cause a serious threat to long-term U.S. economic growth.

A discussion of the unanticipated weakness in the M2 monetary aggregate in recent years, suggesting that the shortfall may be largely attributable to the restructuring of the thrift industry, and an explanation of why economic models predicting M2 growth have had difficulty tracking this weakness.

A look at the recent acceleration in M2, examining evidence that its velocity has stabilized around a new trend, analyzing the usefulness of money in monetary policy deliberations, and highlighting some of the pitfalls of ignoring money growth.

In spite of the recent recession, hopes for the New Economy have been little daunted. Surprisingly robust productivity growth during the recent downturn provides compelling new evidence that something truly fundamental is going on. This Commentary argues that advances in information technology,...

The dividend yield on stocks has dropped sharply over the last decade. Is its drop a consequence of irrational exuberance? This Commentary assesses alternative explanations for the diminished dividend yield.

Revelations of corporate fraud in 2002 shook the public's confidence in financial reporting and led to calls for reform. Without credible, transparent, and comparable financial information, investors, auditors, and others cannot make decisions that are essential to the efficient functioning of...

Options contracts on federal funds futures, a new financial instrument introduced earlier this year, can be analyzed to gauge public expectations of future Fed actions. The real bonus is that they can detect differences of opinion when markets see more than two possible outcomes for an FOMC...

How well did the federal funds futures market anticipate recent monetary policy actions? The authors examine the predictive content of fed funds futures rates, which provide the Federal Open Market Committee with a clear reading of market expectations for policy, in the context of 1994 policy...