1. The views expressed here are my own and not necessarily those of my colleagues in the Federal Reserve System. I am indebted to members of the Board staff--John Maggs, Karen Pence, Jeremy Rudd, and William Wascher--who contributed to the preparation of these remarks, and to Board staff members Sejla Karalic and Christopher Nekarda for assistance with the exhibits. Return to text
2. The law calls on the Federal Reserve to "promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates." See section 2A of the Federal Reserve Act (12 U.S.C. §225a as added by act of Nov. 16, 1977 (91 Stat. 1387) and amended by acts of Oct. 27, 1978 (92 Stat. 1897); Aug. 23, 1988 (102 Stat. 1375); and Dec. 27, 2000 (114 Stat. 3028)). Return to text
3. The average for other postwar recoveries would be even higher if one were to exclude the three-year periods following the 1957-58 and 1980 recessions, which included at least part of subsequent recessions. Return to text
4. The results in the figure are derived from a model that relates GDP growth in recoveries to recession depth and duration. See Greg Howard, Robert Martin, and Beth Anne Wilson (2011), "Are Recoveries from Banking and Financial Crises Really So Different?" International Finance Discussion Papers 1037 (Washington: Board of Governors of the Federal Reserve System, November). Return to text
5. These calculations are based on Federal Reserve Board estimates of fiscal impetus, which measures the boost to aggregate demand from increased government purchases as well as the effects of changes in tax and entitlement policies on consumer and business spending. See Glenn Follette and Byron Lutz (2010), "Fiscal Policy in the United States: Automatic Stabilizers, Discretionary Fiscal Policy Actions, and the Economy," Finance and Economics Discussion Series 2010-43 (Washington: Board of Governors of the Federal Reserve System, June). Return to text
6. See Michael W. McCracken (2011), "Housing's Role in a Recovery (PDF) ," Federal Reserve Bank of St. Louis, Economic Synopses, no. 6 (February), pp. 1-2. Return to text
7. See Board of Governors of the Federal Reserve System, Statistical Release Z.1, "Flow of Funds Accounts of the United States," table B.100, line 49 (Owners' Equity in Household Real Estate). Return to text
8. See Ben S. Bernanke (2012), "Monetary Policy since the Onset of the Crisis," speech delivered at "The Changing Policy Landscape," a symposium sponsored by the Federal Reserve Bank of Kansas City, held in Jackson Hole, Wyo., August 30-September 1. Return to text
9. Mean annual poverty rate for all people, U.S. Bureau of the Census. Return to text
10. See Steven J. Davis and Till Von Wachter (2011), "Recessions and the Costs of Job Loss," Brookings Papers on Economic Activity, Fall, pp.1-72. Return to text
11. See Louis S. Jacobson, Robert J. LaLonde, and Daniel G. Sullivan (1993), "Earnings Losses of Displaced Workers," American Economic Review, vol. 83 (September), pp. 685-709. Return to text
12. See, for example, the minutes of several recent FOMC meetings held on December 11-12, 2012; September 12-13, 2012; and July 31-August 1, 2012: Board of Governors of the Federal Reserve System (2013), "Minutes of the Federal Open Market Committee, December 11-12, 2012," press release, January 3; Board of Governors of the Federal Reserve System (2012), "Minutes of the Federal Open Market Committee, September 12-13, 2012," press release, October 4; and Board of Governors of the Federal Reserve System (2012), "Minutes of the Federal Open Market Committee, July31-August 1, 2012," press release, August 22. Return to text
13. See Edward P. Lazear and James R. Spletzer (2012), "The United States Labor Market: Status Quo or a New Normal?" NBER Working Paper Series 18386 (Cambridge, Mass.: National Bureau of Economic Research, September). See also Ay#egül #ahin, Joseph Song, Giorgio Topa, and Giovanni L. Violante (2012), "Mismatch Unemployment," NBER Working Paper Series 18265 (Cambridge, Mass.: National Bureau of Economic Research, August). Return to text
14. See Jesse Rothstein (2012), "The Labor Market Four Years into the Crisis: Assessing Structural Explanations," Industrial and Labor Relations Review, vol. 65 (July), pp. 467-500. Return to text
15. For example, see Board of Governors of the Federal Reserve System (2009), "FOMC Statement," press release, March 18. Return to text
16. For example, see Board of Governors of the Federal Reserve System (2011), "FOMC Statement," press release, August 9. Return to text
17. See Board of Governors of the Federal Reserve System (2012), "FOMC Statement," press release, December 12. Return to text
18. The FOMC's Statement on Longer-Run Goals and Monetary Policy Strategy (PDF), as amended effective on January 29, 2013, is available on the Board's website. Return to text
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