We identify America's First Great Moderation, a recession-free 16-year period from 1841 until 1856, that represents the longest economic expansion in U.S. history. Occurring in the wake of the debt-deleveraging cycle of the late 1830s, this “take-off” period's high rates of economic growth...

Some bond investors form expectations for future interest rates by either assuming that yields will not change over time (i.e. random walk), or that future spot rates will evolve to match current forward rates (i.e., the expectations hypothesis). Recent academic research argues that we can do...

We quantify the time-varying effects of oil-price shocks on the U.S. economy, Federal Reserve policy, and global equity markets. While the first-round impact of oil-price shocks on U.S. economic growth has not changed materially over time, their formerly-negative second-round effects are notably...

Inflation is a fundamental macroeconomic risk factor for a broad range of asset classes. Since the 1980s, global inflation has generally trended lower and inflation shocks have become less persistent despite, at times, considerable commodity-price volatility. Will this lower inflation trend...

The accuracy of U.S. stock return forecasts based on the cyclically-adjusted P/E (CAPE) ratio has deteriorated since 1985. The issue is not the CAPE ratio, but CAPE regressions that assume it reverts mechanically to its long-run average. Our approach conditions mean reversion in the CAPE ratio...

Most major American industrial business cycles from around 1880 to the First World War were caused by fluctuations in the size of the cotton harvest due to economically exogenous factors such as weather. Wheat and corn harvests did not affect industrial production; nor did the cotton harvest...

The persistent downturn in productivity growth during the past two decades has cast doubts on global economic prospects. Frequently cited causes include a dearth of productivity-enhancing ideas, an aging population, and a shift to service-based economies. While we acknowledge the role each of...

Predicting long-term equity market returns is of great importance for investors to strategically allocate their assets. We apply machine learning methods to forecast 10-year-ahead U.S. stock returns and compare the results to traditional Shiller regression-based forecasts more commonly used in...

The recent world energy crisis raises serious questions about the extent to which the United States should increase domestic oil production and develop alternative sources of energy. We examine the energy developments in Brazil as an important experiment. Brazil has reduced its share of imported...