Brookings Podcast on Economic Activity

In early 2020, the COVID-19 pandemic struck national economies like a hammer. As the disease spread, workers went home, businesses were empty, and economic indicators crashed. Now, five years later, the U.S. economy looks in many ways like it did pre-pandemic, with GDP back on to the pre-pandemic trend and unemployment down to around 4% after spiking to over 10% in 2020. On this episode of the Brookings Podcast on Economic Activity...

Housing prices nationally are at an all-time high, including in many metro areas that were previously considered affordable alternatives to coastal markets. While prices have been rising over recent decades, the average growth rates of housing stock have been in decline. In a new BPEA paper, Edward Glaeser and Joseph Gyourko explore the evolving dynamics of the U.S. housing market, focusing on six metropolitan areas and in particul...

At around $900 billion in transactions daily, the market for U.S. Treasuries is massive, not only in terms of quantity but also in terms of importance to the U.S. and global economies. The Treasury market is tied to interest rates, the value of the dollar, and financial markets around the world. So when shocks hit the Treasury market, as they did during the COVID-19 crisis, the ripple effects can be global. In a new paper, “Treasur...

The U.S. trade deficit has long been a source of political consternation, but it has come to the forefront in recent weeks. Just a few months into Donald Trump’s second term, he has made the trade deficit a key target of his aggressive tariff policies. On the day that President Trump announced a new, sweeping round of tariffs on all U.S. trade partners, Brookings Senior Fellow Gian Maria Milesi-Ferretti was joined by Maurice Obstfe...

The Federal Reserve’s “Statement on Longer-Run Goals and Monetary Policy Strategy”—commonly referred to as its monetary policy framework—is composed of guiding principles the central bank uses in setting and communicating policy. Since the Fed last updated this framework in 2020, the global economy has faced unique challenges: COVID-19 shutdowns, widespread supply chain issues, and multiple global wars. In 2025, the Fed Board will ...

The clean energy transition has quietly pushed ahead in recent decades, with solar and wind energy accounting for almost 15% of total U.S. energy production in February 2024. The benefits of this transition on climate change have been celebrated, but less acknowledged have been the potential economic benefits. In a new paper, “The economic impacts of clean power,” Costas Arkolakis and Conor Walsh explain how cheaper electricity res...

Fiscal deficit projections are used by policymakers to understand the trajectory of U.S. debt. Between 1984 and 2003, Congress was responsive to these projections, raising taxes and cutting spending when projections showed that the deficit would grow. However, since 2004, fiscal policy has ceased being responsive to debt projections regardless of the party in power. In a new paper, “Robust Fiscal Stabilization,” Alan Auerbach and D...

When Congress considers legislation, nonpartisan agencies provide estimates of the law’s potential economic effects to policymakers, a process known as “scoring.” In recent decades, analysts at the Congressional Budget Office and Joint Committee on Taxation have developed models that incorporate complex feedback effects, going beyond conventional scoring techniques. These “dynamic scoring” methods can produce significantly differen...

Since 2022, Western nations have put a number of sanctions on Russia in response to its war in Ukraine. Policymakers and pundits have debated the efficacy of these measures, but this debate is belied by a deeper question: what does it mean for sanctions to “work”? In new BPEA research, Oleg Itskhoki of Harvard and Elina Ribakova of the Peterson Institute for International Economics explore fundamental questions of the theory and pr...

The full-employment rate of unemployment may seem like a contradiction, but in fact, economists have long understood that some unemployment is necessary. In their new paper, Pascal Michaillat of UC Santa Cruz and Saez of the University of California, Berkeley present a new formula for identifying the efficient rate of unemployment in the U.S. and find that the labor market has been inefficiently slack for most of the last century. ...

As COVID-19 swept across the globe, many nations struggled to define a cohesive public health strategy to prevent the spread of the disease. However, in spite of the lack of a clear plan, improvised strategies of behavioral changes—e.g., masking, social distancing—slowed transmission until a vaccine could be developed. The new BPEA paper, “The impact of vaccines and behaviors on U.S. cumulative deaths from COVID-19,” estimates that...

The failure of three mid-sized banks in March 2023—three of the four largest bank failures in history—shook financial markets and could’ve spread to other banks if regulators hadn’t stepped in. Two on-going trends in finance contributed to these failures: an increase in uninsured deposits and the migration of business lending to non-banks. In a new paper, “The evolution of banking in the 21st century,” a group of Harvard researcher...

Most advanced economies enjoyed a long period of low, stable inflation prior to 2021, with inflation Read more