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Federal Reserve System

U.S. Economy in Recession: Similarities To and Differences From the Past

Posted Tue, 11/10/2009 - 00:00

According to the National Bureau of Economic Research (NBER), the U.S. economy entered a recession in December 2007. It is now the longest recession of the post-World War II era. The recession can be separated into two distinct phases. During the first phase, which lasted for the first half of 2008, the recession was not deep as measured by the decline in gross domestic product (GDP) or the rise in unemployment. It then deepened from the third quarter of 2008 to the first quarter of 2009.

Systemic Risk and the Federal Reserve

Posted Wed, 10/28/2009 - 00:00

The recent financial crisis contained a number of systemic risk episodes, or episodes that caused instability for large parts of the financial system. The lesson some policymakers have taken from this crisis is that a systemic risk or "macroprudential" regulator is needed to prevent similar episodes in the future. But what types of risk would this new regulator be tasked with preventing, and is it the case that those activities are currently unsupervised?

Financial Market Turmoil and U.S. Macroeconomic Performance

Posted Sat, 07/25/2009 - 23:00

A large and relatively unimpeded flow of credit through healthy financial markets is a salient
attribute of the U.S. economy and any well functioning modern economy. Banks and other
financial institutions channel the economy?s savings toward a variety of current productive uses.
By borrowing short-term and lending long-term, these institutions create a flow of credit that
passes liquidity from savers to investors, and transforms liquid short-run assets into less liquid
long-term assets.

Economic Stimulus: Issues and Policies

Posted Fri, 02/27/2009 - 00:00

Recent policies have sought to contain damages spilling over from housing and financial markets
to the broader economy, including monetary policy, which is the responsibility of the Federal
Reserve, and fiscal policy, including a tax cut in February 2008 of $150 billion and two
extensions of unemployment compensation in June and November of 2008.