Bank reserves in the United States increased dramatically at the end of 2008. Subsequent asset purchase programs in 2009 and 2011 more than doubled the quantity of reserves outstanding. These events required major adjustments in banks' balance sheets. We study the evolution of reserve holdings...

K-core inflation is a new class of underlying inflation measures. The two most popular measures of underlying inflation are core inflation and trimmed mean inflation. The former removes fixed categories of goods and services (food and energy) from the inflation calculation, and the latter...

In linear macroeconomic models, an active Taylor rule for monetary policy can guarantee a locally unique nonexplosive equilibrium. In a series of articles, Benhabib, Schmitt-Grohé, and Uribe looked beyond the local dynamics and showed that active Taylor rules could interact with the zero bound...

The relative prices of different categories of consumption goods have been trending over time. Assuming they are exogenous with respect to monetary policy, these trends imply that monetary policy cannot stabilize the prices of all consumption categories. If prices are sticky, monetary policy...

In simple sticky-price models, the guiding principle for optimal monetary policy is to stabilize nominal prices so as to eliminate the distortions associated with price adjustment. If there is only one sector, or one category of consumption goods, then stabilizing nominal prices means making the...

Federal Reserve Banks distribute currency to — and accept deposits from — depository institutions. Currency that the Federal Reserve distributes is either newly printed by the Bureau of Engraving and Printing, or previously deposited by banks. Currency that banks deposit with the Fed is...

Nominal and real interest rates are often viewed from the perspectives of the intuitively appealing Fisher relationship and pure expectations hypothesis. These complementary relationships relate real or nominal long-term interest rates to expected future short-term interest rates and relate...

Inflation reflects the joint behavior of price changes for individual goods and expenditure shares of different goods. We measure the contribution of changing expenditure shares to inflation behavior by constructing alternative inflation measures that hold fixed the weights on price changes for...