Economic Research Federal Reserve Bank of Dallas

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Contents Top executives 2 Research at the Dallas Fed 3 Globalization and Monetary Policy Institute 4 Department officers 7 Research economists 10 Business economists 16 Research support 18 Selected research analyst profiles 19 Department publications and reports 20 Dallas Fed working papers 21 Globalization institute working papers 22 Research staff from around the world 23

Economic Research is published by the Federal Reserve Bank of Dallas, P.O. Box 655906, Dallas, TX 75265-5906. It is available on the web at www.dallasfed.org/research.

The Federal Reserve Bank of Dallas has served the financial institutions of the Eleventh District since 1914. The district’s 360,000 square miles encompass Texas, northern Louisiana and southern New Mexico and are home to roughly 27 million people. In addition to its headquarters in the heart of Uptown Dallas, the Bank operates three branch offices, in El Paso, Houston and San Antonio. Like the Federal Reserve System’s 11 other district Banks, the Dallas Fed employs a staff of economists to advise the Bank president on policy issues and engage in academic research. This publication will enable those interested in joining the Dallas Fed’s economic research team to learn more about the department—its structure, its leadership, its members and its mission—and the overall benefits of working at the Dallas Fed. 2 FEDERAL RESERVE BANK OF DALLAS

Top Executives

Evan F. Koenig Senior Vice President and Principal Policy Advisor

Koenig serves as the Bank’s Koenig has been active in economic research of Money, Credit and Banking and Journal of Public principal monetary policy for three decades. His recent efforts have focused on Economics. advisor. In that capacity, he predicting and explaining movements in prices, output Koenig earned a bachelor’s degree, with honors, regularly attends meetings of and employment and on understanding monetary policy’s from the University of Wisconsin–Madison and a doctor- the Federal Open Market Com- role in the economy. His articles have appeared in Dallas ate in economics from Harvard University. He joined the mittee (FOMC) with the Bank’s Fed publications and in such scholarly journals as the Dallas Fed in 1988 after teaching for several years at the president, oversees preparations Quarterly Journal of Economics, Review of Economics and University of Washington–Seattle. for FOMC and other policy meetings and briefs the Bank’s Statistics, Journal of Business and Economic Statis- president and directors on economic developments. tics, International Journal of Central Banking, Journal

Mine K. Yücel Senior Vice President and Director of Research

Yücel has been with the Bank ness Economics board of directors and was president Fellow Award in 2007, the Energy Journal Best Paper since 1989. She is an adviser of the International Association of Energy Economics Award in 2009 and the Outstanding Contributions to the to the Dallas Fed president on (IAEE) in 2011. She is also past-president of the United IAEE Award in 2015. regional and energy issues and States Association for Energy Economics (USAEE). She Before joining the Bank, she was an assistant serves as director of research has served on the executive boards of Executive Women professor of economics at Louisiana State University. publications. Yücel was head of of Dallas, Dallas Area Business Economists, the Dallas She has a BS and an MS in mathematics from Bogazici the Bank’s micro/regional/energy chapter of Women in Technology International Inc. and University in Istanbul, Turkey, and a PhD in economics group for many years and has published numerous articles the Greater Dallas Chamber’s Board of Economists. In from Rice University in Houston. on energy and regional growth. 2006, she was chosen as a recipient of the Key Women Yücel serves on the National Association for Busi- in Energy–Global award. She received the USAEE Senior 3 FEDERAL RESERVE BANK OF DALLAS

Research at the Dallas Fed

Responsibilities of economists at the Dallas Fed Globalization and housing wealth on consumption, the Wicksell- center on the Bank’s core monetary policy mission The Dallas Fed is committed to becoming a center ian neutral real rate of interest, the effects of financial and the production of substantive, publishable of excellence for research on globalization and its innovations on home prices and the effects of monetary research. implications for the U.S. economy and monetary policy. policy and supply shocks. A special topic that has Monetary policy work includes briefing Its Globalization and Monetary Policy Institute is the attracted a great deal of outside interest has been the the Bank president prior to Federal Open Market embodiment of this commitment. The institute’s mis- effects of regulatory reform on the largest U.S. financial Committee meetings, preparing memos or studies sion is to seek answers to the challenging questions institutions. for senior management, presenting topics to the globalization poses for monetary policy, while the Bank’s board of directors and writing for the Bank’s Research Department continues its analysis of issues Micro/Regional/Energy Economics publications. To encourage cutting-edge research, that affect the national and regional economies. Microeconomists at the Dallas Fed research how mar- the department provides staff members with time to Monetary policy makers face new, often complex ket changes affect individual behavior and economic engage in ambitious research projects. issues in an increasingly integrated world in which growth and analyze the implications for public policy. Involvement in policy work is at the heart barriers to trade, capital and labor flows are falling. Topics of recent and ongoing work include U.S. house- of the Bank’s mission, but new staff members are By studying the dynamics of the inflation process in hold savings behavior, immigration’s impact on host eased into policy work. New PhDs typically devote the U.S., asking how globalization has impacted it and and home economies, and the role of fiscal policy on the majority of their first year to academic research. identifying the appropriate monetary policy response, our country’s short- and long-term economic growth. Once acclimated, economists spend an average of the institute intends to advance the thinking of the Regional economists and support staff study half their time on monetary policy-related issues and Federal Reserve and the economics profession about trends in the Texas economy while engaging in topics that leverage their interests and talents. the consequences of increased openness and global in- research on such topics as the return to postsecond- Advancement within the department is deter- terconnections. The institute has proven quite prolific, ary education, the demographics of local real estate mined by contributions to the Bank’s core mission publishing working papers and developing the tools markets, the maquiladora industry and its impact on and publication records. necessary to address this important research area. the U.S.–Mexico border economy, and the dynam- The department supports an active seminar ics of local labor markets. Regional economists also and visitor program. Staff have the opportunity to Macroeconomics gather anecdotal reports on business developments in invite coauthors to the Bank as seminar speak- Macroeconomists and monetary policy specialists pro- the Dallas Fed’s Eleventh District, summarizing them ers and visitors. With a travel budget on par with vide information and analysis to the Bank’s president into the Beige Book survey. The research group has major university departments, economists have and directors to assist them in devising and imple- developed several tools and surveys to better gauge the an opportunity to attend and present their work at menting effective policy. This group also conducts regional economy’s health—the Texas Leading Index professional meetings, both within the United States long-term research to increase our understanding of and the Texas Business Outlook Surveys among them. and overseas. the macroeconomy and the channels through which In the energy area, research centers on the market A flexible leave-of-absence policy has allowed it is influenced by monetary policy and to develop forces and policies that shape world energy prices staff members to spend short to extended periods at improved methods for tracking and forecasting changes and their effect on overall economic activity. Recent top-tier universities and at the Council of Economic in macroeconomic conditions. In addition to their indi- topics include the differential effects of demand and Advisers, Board of Governors, U.S. Treasury, Eu- vidual projects, these researchers study the growth and supply shocks on the economy and the implications for ropean Monetary Institute, European Central Bank, composition of aggregate economic activity, alternative monetary policy. Bank of Mexico and Central Bank of Chile, among measures of inflation and labor-market conditions. others. Some staff members also teach at area Financial market economists focus on the interac- universities. tions between finance and the macroeconomy. Topics The tenure of economists currently on staff of recent and ongoing research include factors driving ranges from less than a year to over 30 years. risk premiums in bond yields, the effects of stock 4 FEDERAL RESERVE BANK OF DALLAS

Globalization and Monetary Policy Institute

In 2007, the Federal Reserve Bank of Dallas cre- ute to the peer-reviewed literature at the highest levels, institutions and universities across the country. ated the Globalization and Monetary Policy Institute as well as to the institute’s working paper series and the Dallas Fed Vice President Mark Wynne is the to explore deepening economic integration among Bank’s various publications. The economists present their institute’s director, guiding the research program, hiring countries and to better define the forces that shape the research and act as discussants at conferences and other economists and recruiting scholars as research fellows world economy. professional functions. and associates. Some of the world’s leading thinkers on The institute’s long-term business objective is to Staff members also serve as referees for a host of monetary policy serve on the institute’s advisory board, make the Dallas Fed a recognized center of excellence journals, including the Journal of Monetary Economics, and six senior fellows are actively involved. Wynne and six in the study of globalization and how it alters the way Journal of International Economics, Journal of Develop- other full-time economists form the institute’s core. policymakers should think about monetary policy. To that ment Economics and Review of Economic Dynamics. end, staff economists are strongly encouraged to contrib- They also develop joint projects with researchers at other

Board of Advisors John B. Taylor, Chairman R. Glenn Hubbard Guillermo Ortiz Senior Fellow, Hoover Institution Dean and Russell L. Carson Professor of Finance Governor, Banco de México, 1998–2009 Mary and Robert Raymond Professor of Economics, and Economics, Graduate School of Business, Kenneth S. Rogoff Stanford University Columbia University Thomas D. Cabot Professor of Public Policy, Undersecretary of the Treasury for International Affairs, Chairman, Council of Economic Advisers, 2001–03 Harvard University 2001–05 Otmar Issing Director of Research, International Monetary Fund, Charles R. Bean President, Center for Financial Studies (Germany) 2001–03 Deputy Governor, Bank of England, 2008–14 Executive Board Member, European Central Bank, Masaaki Shirakawa Executive Director and Chief Economist, 1998–2006 Director and Vice Chairman, Bank for International Bank of England, 2000–08 Horst Köhler Settlements Martin Feldstein President, Federal Republic of Germany, 2004–10 Governor, Bank of Japan, 2008–13 George F. Baker Professor of Economics, Managing Director, International Monetary Fund, Professor, Kyoto University School of Government, Harvard University 2000–04 2006–08 President Emeritus, National Bureau of Finn Kydland William White Economic Research Jeff Henley Professor of Economics, Former Head of the Monetary and Economic Heng Swee Keat University of California, Santa Barbara Department, Bank for International Settlements Minister for Education, Parliament of Singapore Recipient, 2004 Nobel Memorial Prize in Managing Director, Monetary Authority of Singapore, Economic Sciences 2005–11 5 FEDERAL RESERVE BANK OF DALLAS

Globalization and Monetary Policy Institute

Research Associates Raphael Auer Aitor Erce Julien Martin Jens Søndergaard Swiss National Bank Bank of Spain Paris School of Economics Capital Strategy Research Simone Auer Ester Faia Césaire Meh Bent E. Sorensen Swiss National Bank Goethe University Frankfurt Bank of Canada University of Houston Chikako Baba Rasmus Fatum Arnaud Mehl Heiwai Tang International Monetary Fund University of Alberta School of Business European Central Bank Johns Hopkins University Pierpaolo Benigno Andrew Filardo Simone Meier Cédric Tille LUISS Guido Carli Bank for International Settlements Swiss National Bank Graduate Institute for International and Development Studies Martin Berka Andreas Fischer Fabio Milani Victoria University of Wellington Swiss National Bank University of California, Irvine Ben A.R. Tomlin Bank of Canada Saroj Bhattarai Marcel Fratzscher Philippe Moutot Pennsylvania State University German Institute for Economic Research European Central Bank Kozo Ueda Waseda University, Tokyo Javier Bianchi Ippei Fujiwara Daniel Murphy University of Wisconsin–Madison Australian National University University of Virginia Eric van Wincoop University of Virginia Claudio Borio Pedro Gete Piyusha Mutreja Bank for International Settlements Georgetown University Syracuse University Giovanni Vitale European Central Bank Hafedh Bouakez Bill Gruben Deokwoo Nam HEC Montréal Texas A&M International University City University of Hong Kong Xiao Wang University of North Dakota Matthieu Bussière Sophie Guilloux Dimitra Petropoulou Banque de France Bank of France University of Sussex Yong Wang Hong Kong University of Science and Matteo Cacciatore Ping He Vincenzo Quadrini Technology HEC Montréal Tsinghua University University of Southern California Tomasz Wieladek Alessandro Calza Gee Hee Hong Attila Rátfai London Business School European Central Bank Bank of Canada Central European University Hakan Yilmazkuday Bo Chen Yi Huang Kim Ruhl Florida International University Shanghai University of Finance and The Graduate Institute Geneva Stern School of Business Economics Jianfeng Yu Erasmus Kersting Katheryn Russ University of Minnesota Hongyi Chen Villanova University University of California, Davis Hong Kong Institute for Monetary Zhi Yu Research Enisse Kharroubi Filipa Sa Shanghai University of Finance and Bank for International Settlements University of Cambridge Economics Yin-Wong Cheung University of California, Santa Cruz/ Mina Kim Raphael Schoenle Yu Yuan City University of Hong Kong Bureau of Labor Statistics Brandeis University University of Iowa C.Y. Choi Robert Kollmann Giulia Sestieri University of Texas at Arlington European Centre for Advanced Research Banque de France in Economics and Statistics Dudley Cooke Etsuro Shioji University of Exeter Business School Charles Ka Yui Leung Hitotsubashi University City University of Hong Kong Richard Dennis Shigenori Shiratsuka Australian National University Nan Li Bank of Japan Ohio State University Roberto Duncan Ina Simonovska Ohio University Shu Lin University of California, Davis Fudan University Peter Egger L. Vanessa Smith Eidgenössische Technische Hochschule Tuan Anh Luong University of Cambridge Zürich Shanghai University of Finance and Economics 6 FEDERAL RESERVE BANK OF DALLAS

Globalization and Monetary Policy Institute Senior Fellows

Michael Bordo Charles Engel The institute has recruited is a professor of economics at Rutgers University, is professor of economics at the University of Wiscon- research associate at the National Bureau of Economic sin–Madison and a research associate of the National several eminent scholars Research and a member of the Shadow Open Market Bureau of Economic Research. He has written exten- Committee. He has written extensively about the sively on exchange rate determination. He is coeditor to serve as senior research economic history of globalization, financial crises and of the and has been Journal of International Economics fellows. These economics international finance and has held visiting positions a visitor or consultant to central banks around the with a number of foreign universities and central banks. world. He received a BA from the University of North and business professors He received his BA from McGill University, MSc from Carolina at Chapel Hill and a PhD from the University the London School of Economics and PhD from the of California, Berkeley. actively advance the University of Chicago. Karen Lewis institute’s understanding of Mario Crucini is the Joseph and Ida Sondheimer Professor in is associate professor of economics at Vanderbilt International Economics and Finance at the University how policymakers should University. He is associate editor of various academic of Pennsylvania’s Wharton School. In that position, journals and serves as a member of the board of editors she also serves as codirector of the Weiss Center for think about monetary policy of the Review of International Economics. Crucini has International Financial Research. She has been associ- written widely on international business cycles, trade ate editor for a host of publications and is regularly in a globalized world. policy’s contribution to the Great Depression and, most cited for her work in the areas of international financial recently, international pricing. He received a BA from markets and monetary economics. Lewis received a BA the University of Western Ontario and an MA and a PhD from the University of Oklahoma and an MA and a PhD from the University of Rochester. from the University of Chicago.

Michael B. Devereux Francis E. Warnock is professor of economics at the University of British is associate professor of business administration at Columbia and a visiting scholar at the International the University of Virginia’s Darden Graduate School of Monetary Fund in Washington, D.C. He is widely pub- Business. He is a faculty research fellow at the National lished in leading economic journals and is associate Bureau of Economic Research and a research associate editor of the International Journal of Central Banking. at the Institute for International Integration Studies at He received a BA in economics and politics, an MA in Trinity College Dublin. He has served as a consultant economics from University College Dublin and a PhD at the International Monetary Fund, a research fellow from Queen’s University, Kingston, Ontario. at the Hong Kong Monetary Authority and a senior economist in the International Finance Division of the Federal Reserve Board. Warnock received a BA from Johns Hopkins University and PhD from the University of North Carolina at Chapel Hill. 7 FEDERAL RESERVE BANK OF DALLAS

Department Officers (in alphabetical order)

Roberto Coronado John V. Duca Kay Gribbin Assistant Vice President in Charge Vice President and Associate Director of Research Assistant Vice President and Senior Economist (El Paso Branch) Duca leads and conducts research in macroeconomics Gribbin is responsible for administrative support, ac- Coronado serves as the Dallas Fed lead officer and and finance and briefs the Bank president and directors counting, graphics and library services, including the regional economist for West Texas and Southern New on national economic and financial conditions. Historical Library effort. Mexico and oversees the operating and administrative Research interests: Education: functions of the El Paso office. Macroeconomics, money, finance, credit, housing Richland College, AS, Liberal Sciences Research interests: Education: Federal Reserve Bank of Dallas, graduate, Career Mexican economy, maquiladora industry, U.S.– Mexico Princeton University: PhD (1986) Development Program border economy, regional economics Yale University: BA, Phi Beta Kappa, Summa Cum Laude Employment: Education: (1982) 1984–present: Federal Reserve Bank of Dallas University of Houston: PhD (2010); MA, Economics Employment: Leadership roles: (2008) 1991–present: Federal Reserve Bank of Dallas Founding member/ex-officio, Federal Reserve System University of Texas at El Paso: MS (2002); BBA, Cum Committee on Research Support Management Laude and Honors, Accounting and Economics (2000) January 2005–present: Adjunct Professor, Southern Methodist University Former president, Dallas Fed Management Action Team Employment: 2007–09, 2011, 2013–14: Visiting Academic, Oxford 2009–present: Federal Reserve Bank of Dallas, University El Paso Branch May 2005: Visiting Scholar, European University 2010–present: Clinical Assistant Professor, University of Institute Texas at El Paso 1986–91: Federal Reserve Board of Governors 2006–08: Federal Reserve Bank of Dallas, Houston Branch Selected papers and publications: “The Money Market Meltdown of the Great Depres- 2001–06: Federal Reserve Bank of Dallas, El Paso sion,” Journal of Money, Credit and Banking, vol. 45, Branch nos. 2–3, 2013, pp. 493–504. Selected papers and publications: “House Prices and Credit Constraints: Making Sense “The Impact of Maquiladoras on U.S. Border Cities” of the U.S. Experience,” (with John Muellbauer and (with Jesus Cañas, Robert W. Gilmer and Eduardo Anthony Murphy), Economic Journal , vol. 121, no. 552, Saucedo), Growth and Change, vol. 44, no. 3, 2013, pp. 2011, pp. 533–51 415–42. “Financial Technology Shocks and the Case of the “Do Remittances Boost Economic Development? Missing M2,” Journal of Money, Credit and Banking, Evidence from Mexican States” (with Pia M. Orrenius, vol. 32, no. 4, 2000, pp. 820–39. Madeline Zavodny and Jesus Cañas), Law and Business “Optimal Wage Indexation in a Multisector Economy” Review of the Americas, vol. 16, no. 4, 2010, pp. 803–22. (with David VanHoose), International Economic Review, “Business Cycles and Remittances: Can the Beveridge– vol. 32, no. 4, 1991, pp. 859–67. Nelson Decomposition Provide New Evidence?” Globaliza- tion and Monetary Policy Institute Working Paper no. 40, Federal Reserve Bank of Dallas, October 2009. “Restaurant Prices and the Mexican Peso” (with Thomas M. Fullerton Jr.), Southern Economic Journal, vol. 68, no. 1, 2001, pp. 145–55. 8 FEDERAL RESERVE BANK OF DALLAS

Department Officers

Anthony Murphy Pia M. Orrenius Keith R. Phillips Economic Policy Advisor and Senior Research Vice President and Senior Economist Assistant Vice President Economist, Macroeconomics Orrenius is vice president and senior economist with (San Antonio Branch) Research interests: responsibility for the the regional/micro group. She is Research interests: Housing, savings, applied econometrics also executive editor of Southwest Economy. Regional economics, business-cycle analysis, Education: Research interests: forecasting Oxford University: DPhil (2006) Labor and demographic economics, regional econom- Education: ics, migration, immigration policy and Mexico London School of Economics: MSc (1982) Southern Methodist University: PhD (2003) Trinity College Dublin: BA (1980) Education: University of Missouri, Columbia: MA, Economics University of California, Los Angeles: PhD (1999); (1983); BA, Economics (1981); BJ, News-Editorial Employment: MA (1995) (1981) 2010–present: Federal Reserve Bank of Dallas University of Illinois at Urbana–Champaign: BA, 2005–10: Senior Research Officer and Fellow in Employment: Economics, Magna Cum Laude, and Spanish (1990) Economics, Nuffield and Hertford Colleges, Oxford 1984–present: Federal Reserve Bank of Dallas University Employment: 2000–present: Senior Lecturer, Executive MBA 1994–2005: Senior Lecturer, University College Dublin 2005–present: Federal Reserve Bank of Dallas Program, University of Texas at San Antonio July 2004–July 2005: President’s Council of Economic 2000–06: Adjunct Professor, Trinity University, St. Selected papers and publications: Advisers Mary’s University, University of the Incarnate Word “Credit, Housing Collateral and Consumption: Evidence from the U.K., Japan and the U.S.” (with Janine 1999–2004: Federal Reserve Bank of Dallas Selected papers and publications: Aron, John V. Duca, Keiko Murata and John Muellbau- Selected papers and publications: “The Efficiency of the Benchmark Revisions to the er), Review of Income and Wealth, vol. 58, no. 3, 2012, “Does Immigration Affect Whether U.S. Natives Major Current Employment Statistics (CES) Data” (with James pp. 397–423. in Science and Engineering?” (with Madeline Zavodny), Nordlund), Economics Letters, vol. 115, no. 3, 2012, pp. “House Prices and Credit Constraints: Making Sense forthcoming in Journal of Labor Economics. 431-434 of the U.S. Experience” (with John V. Duca and John Beside the Golden Door: U.S. Immigration Reform “Improving the ACCRA U.S. Regional Cost of Living Muellbauer), Economic Journal, vol. 121, 2011, pp. in a New Era of Globalization (with Madeline Zavodny), Index” (with Christina Daly), Journal of Economic and 533–51. Washington, D.C.: AEI Press, 2010. Social Measurement, vol. 34, no. 2, 2009, pp. 119–32. “Housing Markets and the Financial Crisis of “On the Determinants of Optimal Border Enforce- “An Evaluation of Real-Time Forecasting Performance 2007–2009: Lessons for the Future” (with John V. Duca ment” (with Mark Guzman and Joe Haslag), Economic Across 10 Western U.S. States” (with Joaquin Lopez), and John Muellbauer), Journal of Financial Stability, Theory, vol. 34, no. 2, 2008, pp. 261–96. Journal of Economic and Social Measurement, vo. 34, vol. 6, no. 4, 2010, pp. 203–17. “Self-Selection Among Undocumented Immigrants no. 2–3, 2009. “Bootstrapping Long Memory Tests: Some Monte from Mexico” (with Madeline Zavodny), Journal of De- “Measuring Regional Cost of Living” (with Jahyeong Carlo Results” (with Marwan Izzeldin), Computational velopment Economics, vol. 78, no. 1, 2005, pp. 215–40. Koo and Fiona Sigalla), Journal of Business and Eco- Statistics and Data Analysis, vol. 53, no. 6, 2009, pp. nomic Statistics, vol. 18, no. 1, 2000, pp. 127–36. 2,325–34. 9 FEDERAL RESERVE BANK OF DALLAS

Department Officers

Mark A. Wynne Vice President and Associate Director of Research; Director, Globalization and Monetary Policy Institute Wynne is responsible for developing and leading the Bank’s research program on globalization and understanding its implications for the conduct of U.S. monetary policy. Research interests: Macroeconomics, monetary economics, international economics Education: University of Rochester: PhD (1990); MA (1987) University College Dublin: MA, First Class Honours (1982); BA, First Class Honours (1981) Employment: 1999–present: Federal Reserve Bank of Dallas 1997–98: European Monetary Institute/European Central Bank 1989–97: Federal Reserve Bank of Dallas 1994–97: Adjunct Professor, Southern Methodist University Selected papers and publications: “The Global Slack Hypothesis” (with Enrique Martínez-García), Federal Reserve Bank of Dallas Staff Papers, no. 10, 2010. “The Relative Price Effects of Monetary Shocks” (with Nathan S. Balke), Journal of Macroeconomics, vol. 29, no. 1, 2007, pp. 19–36. “Defining Price Stability” (with Stephen G. Cecchetti), Economic Policy, vol. 18, no. 37, 2003, pp. 395–434. “An Equilibrium Analysis of Relative Price Changes and Aggregate Inflation” (with Nathan Balke),Journal of Monetary Economics, vol. 45, no. 2, 2000, pp. 269–92. 10 FEDERAL RESERVE BANK OF DALLAS

Research Economists (in alphabetical order)

Anton Cheremukhin Alexander Chudik Scott Davis Research Economist, Macroeconomics Senior Research Economist and Advisor, Globalization Research Economist, Globalization and Monetary Research interests: and Monetary Policy Institute Policy Institute Macroeconomics, labor market, growth and develop- Research interests: Research interests: ment, international economics International economics, macroeconomics, applied and International macroeconomics, monetary policy Education: theoretical econometrics Education: University of California at Los Angeles: PhD (2010); MA Education: Vanderbilt University: PhD (2009), MA (2006) (2007) Cambridge University: PhD (2008) Duke University: BS (2004) New Economic School: MA, Cum Laude (2005) University of Essex: MSc, Economics and Econometrics, Employment: Distinction (2003) Moscow Institute of Physics and Technology: BSc, Cum 2010–present: Federal Reserve Bank of Dallas Laude (2003); MSc, Cum Laude (2005) Comenius University: MA, Applied Mathematics, 2010: Visiting Researcher, Bank of Estonia Distinction (2002) Employment: 2009–10: Senior Lecturer, Vanderbilt University 2010–present: Federal Reserve Bank of Dallas Employment: Selected papers and publications: 2011–present: Federal Reserve Bank of Dallas Selected papers and publications: “International Real Business Cycles with Endogenous “The Labor Wedge as a Matching Friction” (with 2008–11: European Central Bank, International Policy Markup Variability” (with Kevin X.D. Huang), Journal Paulina Restrepo-Echavarria), Federal Reserve Bank of Analysis Division of International Economics, vol. 85, no. 2, 2011, pp. Dallas Working Paper no. 1004, July 2010. Summer 2006: Intern, International Monetary Fund 302–16. “Labor Matching Model: Putting the Pieces Together,” 2003–04: ING Bank, Research Department “The Adverse Feedback Loop and the Effects of Risk University of California manuscript, January 2010. 2000–02: ING Barings, Research Department in Both the Real and Financial Sectors,” Globalization Selected papers and publications: and Monetary Policy Institute Working Paper no. 66, “Infinite-Dimensional VARs and Factor Models” (with Federal Reserve Bank of Dallas, November 2010. M.H. Pesaran), Journal of Econometrics, vol.163, no.1, 2011, pp. 4–22. “Identifying the Global Transmission of the 2007–09 Financial Crisis in a GVAR Model” (with M. Fratzscher), European Economic Review, vol. 55, no. 3, 2011, pp. 325–39. “Weak and Strong Cross-Section Dependence and Estimation of Large Panels” (with E. Tosetti and M.H. Pesaran), The Econometrics Journal, vol. 14, no. 1, 2011, pp. C45–90. 11 FEDERAL RESERVE BANK OF DALLAS

Research Economists

Wenhua Di Jim Dolmas Everett Grant Senior Research Economist Senior Research Economist and Advisor, Research Economist Research interests: Macroeconomics Research interests: Consumer finance, program evaluation, housing Research interests: International economics, macroeconomics, economic economics Macroeconomics, political economy crises, financial economics Education: Education: Education: Harvard University: PhD (2004) University of Rochester: PhD (1993); MA (1991) University of Virginia: PhD (2015); MA (2011) Peking University: MS (1999); BS (1996) University of Chicago: BA, Honors (1987) Colgate University: BA (2004) Employment: Employment: Employment: 2006–present: Federal Reserve Bank of Dallas 2000–present: Federal Reserve Bank of Dallas 2015: Federal Reserve Bank of Dallas 2006–08: Clinical Professor of Economics, University of 1993–2000: Assistant Professor, Southern Methodist 2004–10: Bridgewater Associates Texas at Dallas University Selected papers and publications: 2004–06: Visiting Assistant Professor of Economics 1998–99: Visiting Assistant Professor, University of “Exposure to International Crises: Trade vs. Financial and Public Policy, University of Texas at Dallas Texas at Austin Contagion,” Job Market Paper, March 2015. 2001–02: Consultant, Development Research Group, 1992–93: Visiting Assistant Professor, Southern Meth- “Wages and Human Capital in Finance: International the World Bank odist University Evidence, 1970–2005” (with Hamid Boustanifar and Selected papers and publications: Selected papers and publications: Ariell Reshef), Working Paper, June 2015. “Is Household Wealth Sustainable? An Examination “On the Political Economy of Immigration and Income of Asset Poverty Reentry After an Exit” (with Tammy Redistribution” (with Greg Huffman), International Eco- Leonard), Journal of Family and Economic Issues, June nomic Review, vol. 45, no. 4, 2004, pp. 1129–68. 2014. “Risk Preferences and the Welfare Cost of Business “The Impact of the Low Income Housing Tax Credit Cycles,” Review of Economic Dynamics, vol. 1, 1998, Program on Local Schools (with James C. Murdoch), pp. 646–76. Journal of Housing Economics, vol. 22, no. 4, 2013, “Endogenous Growth in Multisector Ramsey pp. 308–20. Models,” International Economic Review, vol. 37, no. 2, “An Analysis of the Neighborhood Impacts of a 1996, pp. 403–21. Mortgage Assistance Program: A Spatial Hedonic Model” (with Jielai Ma and James C. Murdoch), Jour- nal of Policy Analysis and Management, vol. 29, no. 4, 2010, pp. 682–97. 12 FEDERAL RESERVE BANK OF DALLAS

Research Economists

Christoffer Koch Anil Kumar Enrique Martínez-García Research Economist, Macroeconomics Senior Research Economist and Advisor, Micro/ Senior Research Economist, Globalization and Research Interests: Regional/Energy Monetary Policy Institute Macroeconomics, money and banking Research interests: Research interests: Education: Public finance, labor economics, econometrics International macroeconomics (open-economy macroeconomics) and finance, macroeconomics and monetary University of Oxford: DPhil, Economics (2011); MPhil, Education: economics, applied econometrics Economics (2007) Syracuse University: PhD (2004); MS, Applied Statistics University of St. Andrews: MA, Honors, Economics (2004) Education: (2005) Bombay University, India: MMS (equivalent to MBA), University of Wisconsin–Madison: PhD (2007); MSc (2004) Employment: Marketing and Finance (1989) University of Pennsylvania: MA (2002) 2011–present: Federal Reserve Bank of Dallas Employment: 2004–present: Federal Reserve Bank of Dallas University of Alicante, Spain: BA Economics, Honors Selected papers and publications: (2000) “Deregulation and the Lending Channel: Quantifying 2001–04: Research Associate, Center for Policy Its Effects on Monetary Policy Transmission,” University Research, Syracuse University Employment: of Oxford manuscript, June 2011. 2000–01: Graduate Teaching Assistant, Department of 2007–present: Federal Reserve Bank of Dallas “Firm Growth and Firm Size” (with Christian Helmers Economics, Syracuse University Summer 2005: Intern, Bank of England, Monetary and Mark Rogers), Applied Economics Letters, vol. 17, 1991–99: Indian civil service Analysis Division no. 16, 2010, pp.1547–50. Selected papers and publications: Selected papers and publications: “Heterogeneous Bank Lending Responses to Mon- “Nonparametric Estimation of the Impact of Taxes on “U.S. Business Cycles, Monetary Policy and the etary Policy: New Evidence from a Real-Time Identifica- Female Labor Supply,” Journal of Applied Econometrics, External Finance Premium” in Advances in Non-Linear tion” (with John Bluedorn and Christopher Bowdler), vol. 27, no. 3, 2012, pp. 415–39. Economic Modeling: Theory and Applications, Vol. 17, University of Oxford manuscript, August 2009. “Labor Supply, Deadweight Loss and Tax Reform Act Frauke Schleer-van Gellecom, ed., Heidelberg, Germany: of 1986: A Nonparametric Evaluation Using Panel Data,” Springer-Verlag, 2014, pp. 41–114. Journal of Public Economics, vol. 92, nos. 1–2, 2008, “Investment and Real Exchange Rates in Sticky Price pp. 236–53. Models” (with Jens Søndergaard), Macroeconomic “Employer Matching and 401(k) Saving: Evidence Dynamics, vol. 17, no. 2, 2013, pp. 195–234. from the Health and Retirement Study” (with Gary “Bayesian Estimation of NOEM Models: Identification Engelhardt), Journal of Public Economics, vol. 91, no. and Inference in Small Samples” (with Diego Vilán and 10, 2007, pp. 1920–43. Mark Wynne) in Advances in Econometrics, Vol. 28: DSGE Models in Macroeconomics, Nathan Balke, Fabio Canova, Fabio Milani and Mark Wynne, ed., Bingley, U.K.: Emerald Group Publishing, 2012, pp. 137–99. 13 FEDERAL RESERVE BANK OF DALLAS

Research Economists

Michael Plante Jason L. Saving Michael J. Sposi Senior Research Economist, Regional Senior Research Economist and Advisor, Micro/ Research Economist, Globalization and Monetary Research interests: Regional/Energy Policy Institute Macroeconomics, monetary policy, energy economics Research interests: Research interests: Education: Public finance, regional economics, political economy International trade, macroeconomics, economic development Indiana University: PhD (2009) Education: University of Massachusetts, Boston: BA (2002) California Institute of Technology: PhD (1996); MA Education: University of Iowa: PhD (2012) Employment: (1993) University of North Carolina, Charlotte: MS (2007) 2010–present: Federal Reserve Bank of Dallas Rice University: BA, Magna Cum Laude (1991) Central Connecticut State University: BA (2005) 2009–10: Assistant Professor, Ball State University Employment: Employment: Selected papers and publications: 1996–present: Federal Reserve Bank of Dallas “The Long-Run Macroeconomic Impacts of Fuel Sub- 1995–96: Postdoctoral Fellow, George Mason University 2012–present: Federal Reserve Bank of Dallas sidies,” Journal of Development Economics, vol. 107, Selected papers and publications: 2011–12: Visiting Scholar, Federal Reserve Bank of St. 2014, pp. 129–33. “Stock Ownership and Congressional Elections: The Louis “Commodity Futures Investing: Method to the Mad- Political Economy of the Mutual Fund Revolution” (with Selected papers and publications: ness” (with Jackson Thies), Federal Reserve Bank of John V. Duca), Economic Inquiry, vol. 46, no. 3, 2008, “Trade Barriers and the Relative Price of Tradables,” Dallas Economic Letter, vol. 7, no. 5, 2012. pp. 454–79. Federal Reserve Bank of Dallas, Globalization and Mon- “Dynamics of Fiscal Financing in the United States” “A Single Welfare Benefit Level for Europe?”Southern etary Policy Institute Working Paper no. 139, February (with Eric Leeper and Nora Traum), Journal of Econo- Economic Journal, vol. 70, no. 1, 2003, pp. 184–94. 2013. metrics, vol. 156, no. 2, 2010, pp. 304–21. “Government Organization and Power” (with Stephen “Price Equalization Does Not Imply Free Trade” P.A. Brown), Economic Inquiry, vol. 40, no. 3, 2002, pp. (with Piyusha Mutreja, B. Ravikumar, and Raymond 439–49. Riezman), Federal Reserve Bank of Dallas, Globalization and Monetary Policy Institute Working Paper no. 129, September 2012. 14 FEDERAL RESERVE BANK OF DALLAS

Research Economists

Martin Stuermer Antonella Tutino Julieta Yung Research Economist Senior Research Economist, Macroeconomics Research Economist, Globalization and Monetary Policy Institute Research interests: Research interests: Energy, commodities, macroeconomics, resource Applied and theoretical macroeconomics, behavioral Research interests: economics economics and finance, applied Bayesian econometrics Financial economics, international economics and Education: Education: macroeconomics University of Bonn: PhD (2013) Princeton University: PhD (2008); MA (2003) Education: Sciences Po Paris: MA (2007) Bocconi University, Italy: BA, Honors (2001) University of Notre Dame: PhD (2014); MA (2011) Free University Berlin: Diploma (2007) Employment: Delaware State University: BA (2009) Employment: Employment: 2010–present: Federal Reserve Bank of Dallas 2014–present: Federal Reserve Bank of Dallas 2014–present: Federal Reserve Bank of Dallas 2008–10: Board of Governors of the Federal Reserve 2008–14: Research Assistant, University of Bonn Selected papers and publications: Selected papers and publications: 2008: Research Associate, German Federal Institute for “Rationally Inattentive Consumption Choices,” “Can Interest Rate Factors Explain Exchange Rate Geosciences and Natural Resources Review of Economic Dynamics, vol. 16, no. 3, 2013, Fluctuations?” University of Notre Dame, Working Paper, pp. 421–39. 2014. Selected papers and publications: “Argentina’s Term Structure of Interest Rates After the “150 Years of Boom and Bust—What Drives Mineral “Rationally Inattentive Macroeconomic Wedges,” Journal of Economic Dynamics and Control, vol. 35, 2001 Default” University of Notre Dame, Working Paper, Commodity Prices?” University Library of Munich, 2014. MPRA Paper no. 51859, November 2013. no. 3, 2011, pp. 344–62. “Technological Change in Resource Extraction and Endogenous Growth,” University of Bonn, Bonn Econ Discussion Paper no.12, November 2013. “Industrialization and the Demand for Mineral Com- modities,” University of Bonn, Bonn Econ Discussion Paper no.13, November 2013. 15 FEDERAL RESERVE BANK OF DALLAS

Research Economists

Carlos E.J.M. Zarazaga Senior Economist and Advisor, Macroeconomics Research interests: Institutions, structure of information, policy choices Education: University of Minnesota: PhD (1993) Universidad de Buenos Aires, Argentina: Licenciado en Economía (1978) Employment: 1994–present: Federal Reserve Bank of Dallas 1992–94: Federal Reserve Bank of Philadelphia 1985–86: Adviser, Economic Commission, Senate of Argentina 1982–85: Central Bank of Argentina Selected papers and publications: “The Difficult Art of Eliciting Long-Run Inflation Expectations from Government Bond Prices,” Federal Reserve Bank of Dallas Staff Papers no. 9, 2010. “Argentina’s Lost Decade and the Subsequent Recov- ery Puzzle” (with Finn E. Kydland), in Great Depressions of the Twentieth Century, ed. Tim Kehoe and Edward C. Prescott, Minneapolis: Federal Reserve Bank of Min- neapolis, 2007. “Economic Growth in Argentina in the Period 1900–30: Some Evidence from Stock Returns” (with Leonard I. Nakamura), in Latin America and the World Economy Since 1800, ed. John H. Coatsworth and Alan M. Taylor, Boston: Harvard University Press, 1998, pp. 247–70. 16 FEDERAL RESERVE BANK OF DALLAS

Business Economists (in alphabetical order)

Laila Assanie Jesus Cañas Amy Jordan Business Economist, Micro/Regional Business Economist, Micro/Regional Assistant Economist, Micro/Regional Research interests: Research interests: Research interests: Regional economics, housing and real estate Mexican economy and maquiladora industry, regional Regional economics, energy Education: economics Education: London School of Economics: MS, Economics and Education: University of North Dakota: BS, Mathematics and Finance University of Texas at El Paso: MS (2002) Economics Northwestern University: BA, Economics University of Texas at El Paso: BBA, Finance and Cornell University: MA, Economics Employment: Economics (1997) Employment: 2003–present: Federal Reserve Bank of Dallas Employment: 2012–present: Federal Reserve Bank of Dallas Selected papers and publications: 1996–present: Federal Reserve Bank of Dallas Selected papers and publications: “Industry Clusters Shape Texas Economy” (with Mine Selected papers and publications: “Getting Prices Right: Addressing Mexico’s History Yücel), Southwest Economy, September/October 2007. “Regional Business Cycle Integration Along the U.S.– of Fuel Subsidies” (with Michael Plante), Southwest “Incubating Microfinance: The Texas Border Experi- Mexico Border” (with Keith R. Phillips), The Annals of Economy, Third Quarter 2013. ence” (with Raghav Virmani), Southwest Economy, Regional Science, vol. 42, no. 1, 2007, pp. 153–68. “Spotlight: Firms Expect Health Act to Raise Labor September/October 2006. “Maquiladora Employment Patterns in Nuevo Laredo” Costs” (with Pia Orrenius), Southwest Economy, Third “In a State of Change: The Rapidly Growing and (with Thomas M. Fullerton Jr. and Wm. Doyle Smith), Quarter 2013. Increasingly Diverse Population of Texas” (with D’Ann Growth and Change, vol. 38, no. 1, 2007, pp. 23–38. “Risk Characterization, Stale Pricing and the At- Petersen), Bureau of Business Research, University of “Maquiladora Downturn: Structural Change or Cycli- tributes of Hedge Funds Performance,” with Pradosh Texas at Austin, 2005–06. cal Factors?” (with Roberto Coronado and Robert W. Simlai, Journal of Derivatives and Hedge Funds, vol. 17. Gilmer), International Business and Economics Research no. 1, 2011, pp 16–33. Journal, vol. 3, no. 8, 2004, pp. 26–46. 17 FEDERAL RESERVE BANK OF DALLAS

Business Economists

Emily Kerr Janet Koech Jesse B. Thompson III Business Economist, Micro/Regional Assistant Economist, Globalization and Monetary Business Economist, Regional/Energy Research interests: Policy Institute (Houston Branch) Regional economics, labor economics, agriculture Research interests: Research interests: Regional economics, energy, health, education Education: International economics, applied monetary and development economics Baylor University: MS, Economics (2009); BBA, Eco- Education: nomics (2007) Education: University of Houston: MA, Economics (2008); BA, Philosophy and Economics (2005) Employment: University of Kansas: MA, Economics (2007); BBA, Economics (2005) 2009–present: Federal Reserve Bank of Dallas Employment: Employment: 2010–present: Federal Reserve Bank of Dallas Selected papers and publications: “Texas Economy to Ride Higher in the Saddle in 2007–present: Federal Reserve Bank of Dallas 2008–09: University of Houston 2011” (with Keith R. Phillips), Federal Reserve Bank of Selected papers and publications: Selected papers and publications: Dallas Southwest Economy, First Quarter 2011. “Africa—Missing Globalization’s Rewards?” Federal “Recent Trends in Earnings Volatility: Evidence “Natural Gas from Shale: Texas Revolution Goes Reserve Bank of Dallas, Globalization and Monetary from Survey and Administrative Data” (with Sule Celik, Global” (with Robert W. Gilmer), Federal Reserve Bank Policy Institute 2010 Annual Report. Chinhui Juhn and Kristin McCue), The B.E. Journal of of Dallas Southwest Economy, Third Quarter 2010. “The Euro and the Dollar in the Crisis and Beyond” Economic Analysis & Policy, vol. 12, no. 2, 2012, pp. “Getting to the Bottom of Texas’ Latino Pay Gap” (with (with Enrique Martínez-García), Federal Reserve Bank of 1–26. Pia Orrenius and Madeline Zavodny), Federal Reserve Dallas, Globalization and Monetary Policy Institute 2010 “Booming Shale Gas Production Drives Texas Bank of Dallas Southwest Economy, Fourth Quarter Annual Report. Petrochemical Surge,” Federal Reserve Bank of Dallas 2009. “A Historical Look at the Labor Market During Reces- Southwest Economy, Fourth Quarter 2012. sions” (with Enrique Martínez-García), Federal Reserve “Energy Leads the Way as Houston Surges into Bank of Dallas Economic Letter, vol. 5, no. 1, 2010. 2012” (with Robert W. Gilmer), Federal Reserve Bank of Dallas Houston Business, March 2012. 18 FEDERAL RESERVE BANK OF DALLAS

Research Support

Research staff at the Federal Reserve It maintains an updated collection of news stories related to the U.S. and Research staff at Bank of Dallas rely on a variety of monographs and periodicals, as well as Eleventh District economies and the resources both in the production and electronic resources such as full-text Federal Reserve. the Dallas Fed have dissemination of their work. The indi- journal articles, statistical data and Public Affairs also provides com- viduals who provide this collaboration news. munications, logistical, audiovisual and regular access and support are crucial to the Research When a request falls outside of general support for Research Depart- to a variety of Department and its efforts. the collection, the library can use in- ment events, conferences, seminars and terlibrary loan to obtain materials from meetings for academics, policymakers support teams, Consultants other Federal Reserve System libraries and others. In addition to the Research Depart- and libraries around the world. talents and tools. ment’s active seminar and visitor The research library staff are also Conference Sponsorship programs, research consultants are knowledgeable and helpful in search- The Dallas Fed and the Federal Reserve Full-time library, an important part of the department’s ing for data resources and acquiring System host conferences, seminars and efforts, frequently visiting the Bank to datasets for research projects when workshops to meet a variety of econom- IT, editing, design, present their own preliminary work and needed. ic, banking and educational needs. administrative and to collaborate with economic staff. Each year, the Bank partners For example, Nathan Balke, a Information Technology with the University of Texas at Austin analytical personnel professor and former chairman of the and Data Resources and other universities to organize the department of economics at Southern Research staff have access to a state- Texas Monetary Conference. Since provide crucial Methodist University, is a longtime of-the-art computer lab designated its inception in 1992, the conference Bank research consultant who has for computational projects, as well as series has featured leading economists support in publishing collaborated with economists in the remote computer clusters with virtually in the areas of macroeconomics, macroeconomics, globalization and unlimited storage. Commonly used monetary economics and international and disseminating micro/regional/energy groups. software packages include Matlab, R, economics. Stata, SAS, Gauss and EViews. Other notable Dallas Fed confer- research. Support Staff Department economists and ences have included: The department employs a team of full- support staff extensively use a com- • “Housing, Stability and the Macro- time administrative support personnel, prehensive U.S. and international data economy: International Perspec- research assistants and financial and package available from Haver Analytics, tives” economic analysts. It also uses the plus several other rich databases and • “The Causes and Macroeconomic talents of an in-house economic writer information resources. The department Consequences of Uncertainty” also subscribes to Bloomberg to obtain to aid in the preparation of papers for • “Immigration Policy in an Era of current information about financial publication. Globalization” market prices. A summer intern program al- • “The Euro and the Dollar in the lows economists to bring in graduate Crisis and Beyond” students with advanced or specialized Public Affairs • “John Taylor’s Contributions to skills to work on specific projects. The Public Affairs Department provides Monetary Theory and Policy” a seamless editing, design and print- • “The Legacy of Milton and Rose ing process for the Bank’s research Libraries Friedman’s Free to Choose: publications. The department houses a research Economic Liberalism at the Turn of Professional web designers and library that is staffed by professional the 21st Century” content managers assist with the pre- librarians. These librarians keep up sentation of research materials destined • “The Federal Reserve’s Role in with the latest trends and best practices for the public website. the Global Economy: A Historical in the information industry and provide Public Affairs’ media rela- Perspective” resources and services to support the tions staff coordinates requests for • “Ten-Gallon Economy: Sizing Up commitments of our economists. interviews, writes and sends news Texas’ Growth” The library focuses on the subject releases and tweets on economists’ areas of economics, monetary policy, work, monitors national and regional banking and business management. media, and posts a daily briefing of 19 FEDERAL RESERVE BANK OF DALLAS

Selected Research Analyst Profiles

Alan Armen Valerie Grossman Research Assistant, Macroeconomics Research Assistant, Globalization and Monetary Education: Policy Institute University of Oregon: BS, Mathematics; BS, Philosophy Education: (2013) Southern Methodist University: BS, Economics; BA, Previous employment: Advertising (2012) Teaching assistant, University of Oregon, undergraduate Previous employment: mathematics and undergraduate/graduate economics Research Assistant, SMU Economics Department courses Interests: Interests: Dallas Arts District, Texas Rangers, traveling, time with Traveling, math, philosophy, listening to jazz music, family, friends and pets basketball How has your experience at the Dallas Fed What attracted you to the Research Department? shaped your career aspirations? When I first learned about the research assistant position I’ve wanted to work at the Fed since I took my first in the Dallas Fed Research Department, one of the more economics class during my senior year of high school. striking traits I noticed was how closely research assistants I was looking for an outlet to explore the “real world” a work with economists. For example, the Dallas Fed little bit but maintain my ties to academia. The Fed is a website archives many instances of research assistants very influential institution that I knew would afford me coauthoring articles with economists. One of the important many opportunities to learn and work with intelligent skills I have acquired thus far from working with these and talented people and help me decide what I wanted economists is a greater facility for and a detailed under- to focus on in graduate school. The people I’ve met standing of economic data and forecasting methodology. and worked with at the Fed have provided valuable mentoring and a rich experience in applied research. Tyler Atkinson I’ve met Nobel laureates, attended small-group seminars Economic Programmer/Analyst, Macroeconomics presented by people who have economic rules named Education: after them, and seen firsthand how economists interact Boston College: MA, Economics (2015) and learn from each other at academic conferences—a great help in evaluating whether I want to pursue gradu- Texas A&M University: BS, Economics (2010) ate school. Interests: Basketball, board games Describe a typical workday and some examples of professional growth opportunities you’ve experienced in the Research Department. Recent Analysts’ Exit Paths I primarily work on programming for economists’ research project and support policy and current economic analysis as needed. This provides an excellent balance of investing Further education: Employment: time and knowledge into specific research areas while Boston College Graduate School of Bain & Company, Consulting maintaining a broad understanding of the practical matters Arts & Sciences of the policy decision-making process and gauging the Clarion Partners, Real Estate Investment state of the economy. There are frequent seminars for visit- Columbia Business School Deloitte, Consulting ing economists who present interesting new research. The Fulbright Scholarship greatest benefit of working in the Research Department is Exxon Mobil, Energy Finance being surrounded by very bright individuals to collaborate Rice University Federal Reserve Board of Governors, Economic with and learn from. Stanford Graduate School of Business Research University of California, Davis Hoover Institute, Public Policy Research University of Chicago Law School JPMorgan Chase, Investment Banking University of Texas, McCombs School of Business Mutual of Omaha, Actuarial Science 20 FEDERAL RESERVE BANK OF DALLAS

Research Department Publications Annual Report A series of essays that explore contemporary economic issues Economic Letter Timely commentary on the important trends and policy issues shaping our rapidly globalizing, increasingly interconnected economy Globalization and Monetary Policy Institute Annual Report A collection of leading-edge reports and analyses on the interaction between globalization and the execution of monetary policy Southwest Economy Current reports on agriculture, banking, energy, high technology, manufacturing and international trade in the Texas, New Mexico and Louisiana economies Staff Papers tute In-depth analyses of current policy issues d sti an In n y o lic Working Papers ti o a P z y li r Preliminary drafts circulated for professional comment and published by the Globaliza- a ta b e o l n tion and Monetary Policy Institute and the broader Federal Reserve Bank of Dallas o G M FEDERAL RESE RVE BAN K O F DA L LA S Reports of Current DALLASFED Economic Conditions VOL. 9, NO. 6 • JUNE 2014 Dallas Beige Book Economic Summary of anecdotal comments on recent economic conditions and trends Letter

2 RT Economic Updates 013 ANNUAL REPO Inflation Is Not Always and Everywhere a Monetary Phenomenon Timely online reviews of economic conditions in the region, the U.S. and by Antonella Tutino and Carlos E.J.M. Zarazaga the world as well as the energy industry he United States should be Scientists typically welcome extreme Fiscal policy is as experiencing abnormally high cases as a natural magnifying lens that inflation—at least that’s what may expose previously unnoticed flaws T the quantity theory of money in existing theories. In that regard, the significant as, and says should be occurring, given the large German hyperinflation seems to validate sometimes more amounts of money the Federal Reserve the hints from the more recent U.S. experi- Market Value of U.S. Government Debt has put into the nation’s financial system ence that something is wrong with Nobel important than, during its series of “quantitative easing” laureate Milton Friedman’s famous obser- programs following the Lehman Brothers vation that inflation is “always and every- 2 monetary policy in collapse almost six years ago. where a monetary phenomenon.” Government debt reported in terms of its official par value and an imputed market value, Quantitative easing helped expand determining the price the money base at an average annual rate Fiscal Theory of Price Level of 32.3 percent from November 2008 to The fiscal theory of the price level, level and, therefore, September 2012 (Chart 1). pioneered by, among others, Christopher which accounts for changes in interest rates since the debt was issued According to the quantity theory of Sims, the cowinner of the 2011 Nobel the dynamics of money, the annual inflation rate also Memorial Prize in economics, holds should have been around 30 percent. Yet that the conventional monetarist inter- inflation. the corresponding average annualized pretation of inflation misses the mark. inflation rate over that same period (also Instead, fiscal policy is as significant as, shown in Chart 1), as measured by the and sometimes more important than, Real Trade-Weighted Value of the Dollar by U.S. State personal consumption expenditures price monetary policy in determining the DALLASFED index, not only didn’t rise, but showed price level and, therefore, the dynamics signs of declining. of inflation. For example, the end of the Southwest There are also historical examples of interwar German hyperinflation coin- SECOND QUARTER 2014 Inflation-adjusted value of the U.S. dollar against the currencies of the countries with the opposite situation, in which the infla- cided with the introduction of a bold fis- tion rate was several times higher than the cal measure—a new currency backed by money supply growth rate. The German real estate. Economy hyperinflation of 1921–23 is one such The fiscal theory of the price level fur- which each U.S. state trades case. ther implies that primary surpluses—that During that episode, prices on average is, the value of government surpluses quadrupled each month over a 16-month before debt-interest payments—are also No. 22 • December 2013period,1 but the money supply grew con- a key determinant of the price level and Survey of Agricultural Credit Conditions siderablyDALLAS less than that (ChartFED 2). thus of inflation. Bankers’ insights into agricultural lending and land values Texas Business Outlook Surveys Staff Papers

Estimating the Output Gap in Real Time Assessment of current conditions and outlook, including output, employment and prices, covering both the manufacturing and service sectors and the core retail industry by Anton Cheremukhin

Texas Economic Indicators Strength of Economy, Limited } Benefit Eligibility in Texas Curb Monthly online summaries of economic data that include employment, housing, Long-Term Unemployment Rate PLUS energy, exports and manufacturing, both for the state and for select metropolitan areas f Banking Recovery Could Be Vulnerable to Interest Rate Increases

f ‘Reforma Energética’: Mexico Takes First Steps Texas Employment Updates to Overhaul Oil Industry f On the Record: Texas Students Often Lack Skills, State and metro employment data that are revised in advance of Texas Workforce Financial Knowledge for College Success f Spotlight: Would a Texas Central Bank Set Rates Higher? Commission releases Trimmed Mean PCE Inflation Rate Alternative measure of core inflation in the price index for personal consumption expenditures, enhanced by a “Behind the Numbers”report on the data

All publications and economic reports are available on the Dallas Fed website at www.dallasfed.org/research/pubs/index.cfm. 21 FEDERAL RESERVE BANK OF DALLAS

Dallas Fed Working Papers (issued from January 2013 through August 2015)

Working papers from the Dallas No. 1301 No. 1402 No. 1413 Fed’s Research Department are prelimi- Fiscal Sentiment and the Weak Recovery A Theory of Targeted Search Industrialization and the Demand for Mineral nary drafts of the latest research efforts from the Great Recession: A Quantitative Anton Cheremukhin, Antonella Tutino and Commodities from Bank-affiliated economists. These Exploration Paulina Restrepo-Echavarria Martin Stuermer papers are circulated for professional Finn E. Kydland and Carlos E.J.M. Zarazaga No. 1403* No. 1414 comment, generating critical discussion No. 1302 How Do E-Verify Mandates Affect Unauthor- 150 Years of Boom and Bust: What Drives and further exploration of a variety of The Prospect of Higher Taxes and Weak ized Immigrant Workers? Mineral Commodity Prices? economic issues. Papers marked with Job Growth During the Recovery from the Pia M. Orrenius and Madeline Zavodny Martin Stuermer Great Recession: Macro Versus Micro Frisch an * were published in the field’s leading No. 1404 No. 1415* Elasticities academic journals. An updated list of Heterogeneous Bank Lending Responses to The Impact of Temporary Protected Status on Carlos E.J.M. Zarazaga available working papers can be found Monetary Policy: New Evidence from a Real- Immigrants’ Labor Market Outcomes online at www.dallasfed.org/research/ No. 1303* time Identification Pia Orrenius and Madeline Zavodny papers/index.html. The Long-Run Macroeconomic Impacts of John C. Bluedorn, Christopher Bowdler and No. 1416 Fuel Subsidies Christoffer Koch Texas Manufacturing Outlook Survey: Survey Michael Plante No. 1405 Methodology and Performance No. 1304 The Zero Lower Bound and Endogenous Jesus Cañas and Emily Kerr Monetary Policy, the Tax Code, and the Real Uncertainty No. 1501 Effects of Energy Shocks Michael Plante, Alexander W. Richter and Declining Female Labor Supply Elasticities William T. Gavin, Benjamin D. Keen and Finn Nathaniel A. Throckmorton in the U.S. and Implications for Tax Policy: E. Kydland No. 1406 Evidence from Panel Data No. 1305* Deposit Interest Rate Ceilings as Credit Anil Kumar and Che-Yuan Liang Spurious Seasonal Patterns and Excess Supply Shifters: Bank Level Evidence on the No. 1502* Smoothness in the BLS Local Area Unem- Effects of Regulation Q Are Income Taxes Destined to Rise? The Fis- ployment Statistics Christoffer Koch cal Imbalance and Future Tax Policy Keith R. Phillips and Jianguo Wang No. 1407* Jason L. Saving and Alan D. Viard No. 1306 Fuel Subsidies, the Oil Market and the World No. 1503 Immigrants in the U.S. Labor Market Economy Money and Velocity During Financial Crisis: Pia M. Orrenius and Madeline Zavodny Nathan Balke, Michael Plante and Mine Yücel From the Great Depression to the Great No. 1307* No. 1408* Recession Tobin LIVES: Integrating Evolving Credit Income Inequality and Political Polarization: Richard G. Anderson, Michael Bordo, and Market Architecture into Flow of Funds Based Time Series Evidence Over Nine Decades John V. Duca Macro-Models John V. Duca and Jason L. Saving No. 1504 John Duca and John Muellbauer No. 1409* The Other (Commercial) Real Estate Boom No. 1308* A Closer Look at the Phillips Curve Using and Bust: The Effects of Risk Premia and A Closer Look at Potential Distortions in State State Level Data Regulatory Capital Arbitrage RGDP: The Case of the Texas Energy Sector Anil Kumar and Pia Orrenius John V. Duca and David C. Ling Keith Phillips, Raul Hernandez and Benjamin No. 1410 Scheiner Do Restrictions on Home Equity Extraction No. 1309 Contribute to Lower Mortgage Defaults? Disastrous Disappointments: Asset-Pricing Evidence from a Policy Discontinuity at the with Disaster Risk and Disappointment Texas’ Border Aversion Anil Kumar Jim Dolmas No. 1411 No. 1401 Asymmetric Firm Dynamics under Rational What Drives the Shadow Banking System in Inattention the Short and Long Run? Anton Cheremukhin and Antonella Tutino John Duca No. 1412 Macroelasticities and the U.S. Sequestration Budget Cuts Carlos Zarazaga 22 FEDERAL RESERVE BANK OF DALLAS

Globalization and Monetary Policy Institute Working Papers (issued from October 2014 through August 2015)

No. 215 No. 226 No. 237 Working papers from the Geographic Barriers to Commodity Price The Asymmetric Effects of Deflation on Financial Frictions and Policy Cooperation: Globalization and Monetary Policy Integration: Evidence from US Cities and Consumption Spending: Evidence from the A Case with Monopolistic Banking and Stag- Institute are preliminary drafts of the Swedish Towns, 1732-1860 Great Depression gered Loan Contracts institute’s latest research efforts. These Mario J. Crucini and Gregor W. Smith J. Scott Davis Ippei Fujiwara and Yuki Teranishi papers—authored by staff economists, No. 216 No. 227 No. 238 research associates, advisors and senior Noisy Information, Distance and Law of One Bank and Sovereign Risk Feedback Loops Private News and Monetary Policy Forward fellows—are circulated for professional Price Dynamics Across US Cities Aitor Erce Guidance or (The Expected Virtue of comments, generating critical discus- Mario J. Crucini, Mototsugu Shintani and No. 228 Ignorance) sion about the important link between Takayuki Tsuruga Monitoring the World Business Cycle Ippei Fujiwara and Yuichiro Waki globalization and monetary policy. No. 217 Maximo Camacho and Jaime Martinez- No. 239 An updated list of available work- Trends and Cycles in Small Open Economies: Martin Fair Weather or Foul? The Macroeconomic ing papers can be found online at Making the Case for a General Equilibrium No. 229 Effects of El Niño www.dallasfed.org/institute/wpapers/ Approach Real Exchange Rate Forecasting and PPP: Paul Cashin, Kamiar Mohaddes and Mehdi index.cfm. Kan Chen and Mario Crucini This Time the Random Walk Loses Raissi No. 207 No. 218 Michele Ca’ Zorzi, Jakub Muck and Michal No. 240 Can Interest Rate Factors Explain Exchange Aging and Deflation from a Fiscal Perspective Rubaszek Monetary Policy Expectations and Economic Rate Fluctuations? Mitsuru Katagiri, Hideki Konishi and Kozo No. 230 Fluctuations at the Zero Lower Bound Julieta Yung Ueda Do Bank Loans and Local Amenities Explain Rachel Doehr and Enrique Martínez-García No. 208 No. 219 Chinese Urban House Prices? No. 241 No Price Like Home: Global House Prices, The Role of Two Frictions in Geographic Price Daisy J. Huang, Charles K. Leung and Baozhi What Drives the Global Interest Rate 1870–2012 Dispersion: When Market Friction Meets Qu Ronald A. Ratti and Joaquin L. Vespignani Katharina Knoll, Moritz Schularick and Nominal Rigidity No. 231 No. 242 Thomas Steger Chi-Young Choi and Horag Choi Evolving Comparative Advantage, Sectoral Country-Specific Oil Supply Shocks and the No. 209 No. 220 Linkages, and Structural Change Global Economy: A Counterfactual Analysis Unprecedented Actions: The Federal Japan’s Financial Crises and Lost Decades Michael Sposi Kamiar Mohaddes and M. Hashem Pesaran Reserve’s Response to the Global Financial Naohisa Hirakata, Nao Sudo, Ikuo Takei and No. 232 No. 243 Crisis in Historical Perspective Kozo Ueda Global Financial Market Impact of the On the Sustainability of Exchange Rate Target Frederic S. Mishkin and Eugene N. White No. 221 Announcement of the ECB’s Extended Asset Zones with Central Parity Realignments No. 210 Housing Markets and Current Account Purchase Programme Enrique Martínez-García The Federal Reserve Engages the World Dynamics Georgios Georgiadis and Johannes Gräb No. 244 (1970–2000): An Insider’s Narrative of the Pedro Gete No. 233 A New Monthly Indicator of Global Real Transition to Managed Floating and Financial No. 222 Policy Regime Change Against Chronic Economic Activity Turbulence Trilemma, Not Dilemma: Financial Globalisa- Deflation? Policy Option Under a Long-term Francesco Ravazzolo and Joaquin L. Edwin M. Truman tion and Monetary Policy Effectiveness Liquidity Trap Vespignani No. 211 Georgios Georgiadis and Arnaud Mehl Ippei Fujiwara, Yoshiyuki Nakazono and Kozo No. 245 Hot Money and Quantitative Easing: The No. 223 Ueda Is There a Debt-Threshold Effect on Output Spillover Effects of U.S. Monetary Policy on Long-Run Effects in Large Heterogenous No. 234 Growth? Chinese Housing, Equity and Loan Markets Panel Data Models with Cross-Sectionally Sustainable International Monetary Policy Alexander Chudik, Kamiar Mohaddes, M. Steven Wei Ho, Ji Zhang and Hao Zhou Correlated Errors Cooperation Hashem Pesaran and Mehdi Raissi No. 212 Alexander Chudik, Kamiar Mohaddes, M. Ippei Fujiwara, Timothy Kam and Takeki No. 246 Exchange Rates Dynamics with Long-Run Hashem Pesaran and Mehdi Raissi Sunakawa Testing for a Housing Bubble at the National Risk and Recursive Preferences No. 224 No. 235 and Regional Level: The Case of Israel Robert Kollmann Pegging the Exchange Rate to Gain Monetary Forecasting Local Inflation with Global Infla- Itamar Caspi No. 213 Policy Credibility tion: When Economic Theory Meets the Facts A Multi-Country Approach to Forecasting J. Scott Davis and Ippei Fujiwara Roberto Duncan and Enrique Martínez-García Output Growth Using PMIs No. 225 No. 236 Alexander Chudik, Valerie Grossman and M. The Global Component of Local Inflation: Cross-Border Resolution of Global Banks Hashem Pesaran Revisiting the Empirical Content of the Global Ester Faia and Beatrice Weder di Mauro No. 214 Slack Hypothesis with Bayesian Methods The Macroeconomic Effects of Debt- and Enrique Martínez-García Equity-Based Capital Inflows J. Scott Davis 23 FEDERAL RESERVE BANK OF DALLAS

Research Staff from Around the World (by country of origin)

Laila Assanie Anthony Murphy Clifton, Karachi, Dublin, Pakistan Ireland

Jesus Cañas Pia Orrenius Parral, Stockholm, Mexico Sweden

Anton Cheremukhin Ana Prats Sergiev Posad, Camaguey, Russia Cuba

Alexander Chudik Martin Stuermer Germany Nitra, Bonn, Slovakia Germany

Roberto Coronado Antonella Tutino Ciudad Juárez, Divieto, Mexico Italy

Wenhua Di Jack Wang Wuxi, Huangshan, China China

Christoffer Koch Mark Wynne Berlin, Dublin, Germany Ireland

Janet Koech Mine Yücel Nairobi, Istanbul, Kenya Turkey

Fanying Kong Julieta Yung Chang-Chun, Mar del Plata, Buenos Aires, China Argentina

Anil Kumar Carlos Zarazaga Patna, Bihar, Buenos Aires, India Argentina

Enrique Martínez-García Novelda, Alicante Spain 24 FEDERAL RESERVE BANK OF DALLAS 25 FEDERAL RESERVE BANK OF DALLAS Federal Reserve Bank of Dallas 2200 North Pearl Street Dallas, TX 75201 214-922-6000

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2016