In this paper, we examine the prospects for, and implications of, the dollar's continued pivotal role in the international financial system. We find, first, that the dollar remains dominant by a wide margin and will likely retain its dominance for the foreseeable future-none of the other...

This note develops an econometric model of inflation dynamics to assess recent developments. We find that most of the rapid decline in price pressures achieved in 2023 owes to the normalization of supply chains. With supply-chain disruptions now largely resolved, future progress toward...

The electoral campaign of Argentina's new president Javier Milei has revived the debate over the pros and cons of dollarization. Critics argue that dollarizing would force Argentina to import the monetary policy of the Federal Reserve, regardless of whether the Fed's policies are appropriate for...

In this note, we gauge the likely impact of the Delta variant on global GDP growth in the second half of this year. To do so, we use the methodology described in Kamin and Kearns (2021), "Pandemic Prospects and the Global Economic Recovery," to compare projections for global GDP based on the...

This note assesses the relative aggressiveness with which central banks around the world have responded to the post-pandemic surge in inflation. We estimate a "cross-sectional Taylor rule" in which changes in policy interest rates since December 2020 for a range of advanced and emerging market...

This paper describes one of the first attempts to gauge the effect of the COVID-19 pandemic on the global trajectory of a key measure of economic activity – industrial production – over the course of 2020. It is also among the first efforts to distinguish between the role of domestic...

This paper describes one of the first attempts to gauge the effect of the COVID-19 pandemic on the global trajectory of real GDP over the course of 2020 and 2021. It is also among the first efforts to distinguish between the role of domestic variables and global trade in transmitting the...

This paper assesses Latin American monetary policy during the pandemic era against the benchmark of a "balanced" monetary policy strategy, that is, a strategy in which policies respond both to deviations of economic activity from equilibrium as well as deviations of inflation from target. We...

In recent months, as inflation has stubbornly refused to back down and the Federal Reserve threatens ever more monetary tightening, a fearful narrative has taken hold: Rising U.S. interest rates are boosting the dollar to record levels, forcing cheaper currencies and higher import costs onto...

Many observers, including officials at the Federal Reserve, have focused on the need for wages to decelerate if progress toward reducing inflation is to be sustained. We agree that current elevated rates of wage growth would not be consistent with the Fed's 2 percent inflation target in the...