In this Commentary, we show how the interpretation of test results is affected by a test’s reliability rate. Moreover, we discuss how test fallibility may affect the use of tests as a tool to curb the spread of a disease. In particular, we show how administering inexpensive and less precise tests that can be conducted multiple times may be a more efficient way of curbing the pandemic than administering expensive more precise tests once.
{"title":"How Sure Can We Be about a COVID-19 Test Result if the Tests Are Not Perfectly Accurate?","authors":"A. Dizioli, Roberto B. Pinheiro","doi":"10.26509/FRBC-EC-202112","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202112","url":null,"abstract":"In this Commentary, we show how the interpretation of test results is affected by a test’s reliability rate. Moreover, we discuss how test fallibility may affect the use of tests as a tool to curb the spread of a disease. In particular, we show how administering inexpensive and less precise tests that can be conducted multiple times may be a more efficient way of curbing the pandemic than administering expensive more precise tests once.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"280 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122866080","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Edward S. Knotek, M. McMain, Raphael S. Schoenle, Alexander M. Dietrich, K. O. R. Myrseth, Michael Weber
The COVID-19 vaccination drive raises questions about the trajectory of the economic recovery and the pandemic’s impact on consumers’ longer-term behaviors. In this Commentary, we examine the evolution of consumers’ expectations for their post-crisis spending on services that have been dramatically curtailed by the pandemic: visiting restaurants, bars, and hotels, using public transportation, and attending crowded events. We document a U-shaped pattern of expected future use of these services, with growing pessimism in summer 2020 that had largely reversed by fall 2020—for most groups. More recently, higher-income individuals have indicated that they expect to sharply increase their use of these services compared with their pre-pandemic behaviors, but there has been a notable scarring of expectations among older Americans.
{"title":"Expected Post-Pandemic Consumption and Scarred Expectations from COVID-19","authors":"Edward S. Knotek, M. McMain, Raphael S. Schoenle, Alexander M. Dietrich, K. O. R. Myrseth, Michael Weber","doi":"10.26509/FRBC-EC-202111","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202111","url":null,"abstract":"The COVID-19 vaccination drive raises questions about the trajectory of the economic recovery and the pandemic’s impact on consumers’ longer-term behaviors. In this Commentary, we examine the evolution of consumers’ expectations for their post-crisis spending on services that have been dramatically curtailed by the pandemic: visiting restaurants, bars, and hotels, using public transportation, and attending crowded events. We document a U-shaped pattern of expected future use of these services, with growing pessimism in summer 2020 that had largely reversed by fall 2020—for most groups. More recently, higher-income individuals have indicated that they expect to sharply increase their use of these services compared with their pre-pandemic behaviors, but there has been a notable scarring of expectations among older Americans.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"75 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121001605","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ben R. Craig, Thomas M. Phelan, Jan-Peter Siedlarek, J. Steinberg
We compare two types of models used to predict the spread of the coronavirus, both of which have been used by government officials and agencies. We describe the nature of the difference between the two approaches and their advantages and limitations. We compare examples of each type of model—the University of Washington IHME or “Murray” model, which follows a curve-fitting approach, and the Ohio State University model, which follows a structural approach.
{"title":"Two Approaches to Predicting the Path of the COVID-19 Pandemic: Is One Better?","authors":"Ben R. Craig, Thomas M. Phelan, Jan-Peter Siedlarek, J. Steinberg","doi":"10.26509/FRBC-EC-202110","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202110","url":null,"abstract":"We compare two types of models used to predict the spread of the coronavirus, both of which have been used by government officials and agencies. We describe the nature of the difference between the two approaches and their advantages and limitations. We compare examples of each type of model—the University of Washington IHME or “Murray” model, which follows a curve-fitting approach, and the Ohio State University model, which follows a structural approach.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"99 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134029183","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kristoph N. Naggert, Robert W. Rich, Joseph S. Tracy
This Commentary examines the response of longer-run inflation expectations to the FOMC’s August 2020 announced switch to a flexible average inflation-targeting (FAIT) regime. The data indicate an upward shift in the lower end (below 2 percent) of the distribution of inflation expectations and a stronger anchoring of expectations around the 2 percent inflation objective following the announcement, evidence that is consistent with intended effects of the change in the monetary policy framework. To provide context, we also include a retrospective assessment of the response of inflation expectations to the FOMC’s January 2012 announcement of an inflation objective. Lessons from the 2012 announcement suggest that conclusions about the adoption of the FAIT regime should be viewed as tentative. Consequently, we also describe indicators and features of the data to monitor developments going forward.
{"title":"Flexible Average Inflation Targeting and Inflation Expectations: A Look at the Reaction by Professional Forecasters","authors":"Kristoph N. Naggert, Robert W. Rich, Joseph S. Tracy","doi":"10.26509/FRBC-EC-202109","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202109","url":null,"abstract":"This Commentary examines the response of longer-run inflation expectations to the FOMC’s August 2020 announced switch to a flexible average inflation-targeting (FAIT) regime. The data indicate an upward shift in the lower end (below 2 percent) of the distribution of inflation expectations and a stronger anchoring of expectations around the 2 percent inflation objective following the announcement, evidence that is consistent with intended effects of the change in the monetary policy framework. To provide context, we also include a retrospective assessment of the response of inflation expectations to the FOMC’s January 2012 announcement of an inflation objective. Lessons from the 2012 announcement suggest that conclusions about the adoption of the FAIT regime should be viewed as tentative. Consequently, we also describe indicators and features of the data to monitor developments going forward.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115927201","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the financial challenges faced by small businesses during the COVID-19 pandemic and estimate the scale of loans provided to small businesses through the Paycheck Protection Program. We find that the program reached businesses throughout the economy, and we estimate that small businesses in most industry sectors received loans equivalent to between 80 percent and 120 percent of 10 weeks of their 2017 payrolls. That said, there are important differences in the distribution of funds across sectors that suggest some businesses had problems accessing loans and that a significant number of firms with more than 500 employees likely used alternative size criteria to qualify for the program.
{"title":"Which Industries Received PPP Loans?","authors":"Garrett Borawski, M. Schweitzer","doi":"10.26509/FRBC-EC-202108","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202108","url":null,"abstract":"We examine the financial challenges faced by small businesses during the COVID-19 pandemic and estimate the scale of loans provided to small businesses through the Paycheck Protection Program. We find that the program reached businesses throughout the economy, and we estimate that small businesses in most industry sectors received loans equivalent to between 80 percent and 120 percent of 10 weeks of their 2017 payrolls. That said, there are important differences in the distribution of funds across sectors that suggest some businesses had problems accessing loans and that a significant number of firms with more than 500 employees likely used alternative size criteria to qualify for the program.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124658244","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Once a year, financial system regulators and economists meet to present and discuss the latest research on financial stability at a conference sponsored by the Federal Reserve Bank of Cleveland and the Office of Financial Research. The major focus of discussion during the 2020 conference was the impact of the COVID-19 pandemic on the financial system. This Commentary summarizes the ideas and insights presented in the research papers and keynote speeches.
金融系统监管者和经济学家每年都会在克利夫兰联邦储备银行(Federal Reserve Bank of Cleveland)和金融研究办公室(Office of financial research)主办的会议上会面，介绍和讨论有关金融稳定的最新研究成果。2020年会议的主要讨论重点是2019冠状病毒病大流行对金融体系的影响。这篇评论总结了在研究论文和主题演讲中提出的想法和见解。
{"title":"Stress, Contagion, and Transmission: 2020 Financial Stability Conference","authors":"Joseph G. Haubrich","doi":"10.26509/FRBC-EC-202107","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202107","url":null,"abstract":"Once a year, financial system regulators and economists meet to present and discuss the latest research on financial stability at a conference sponsored by the Federal Reserve Bank of Cleveland and the Office of Financial Research. The major focus of discussion during the 2020 conference was the impact of the COVID-19 pandemic on the financial system. This Commentary summarizes the ideas and insights presented in the research papers and keynote speeches.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"550 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123073585","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Commentary examines the extent to which disparities exist between Blacks and whites in labor market outcomes such as levels of labor force participation, unemployment rates, and earnings. To gauge whether disparities have narrowed or widened since 2000, national trends in these outcomes during the past two decades are compared to the trends in three states: Kentucky, Ohio, and Pennsylvania. Finally, to assess the current state of economic inclusion as reflected in the labor market, gaps in Black and white outcomes are compared across US states in 2020.
{"title":"Economic Inclusion 2000–2020: Labor Market Trends by Race in the US and States","authors":"K. Fee","doi":"10.26509/FRBC-EC-202106","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202106","url":null,"abstract":"This Commentary examines the extent to which disparities exist between Blacks and whites in labor market outcomes such as levels of labor force participation, unemployment rates, and earnings. To gauge whether disparities have narrowed or widened since 2000, national trends in these outcomes during the past two decades are compared to the trends in three states: Kentucky, Ohio, and Pennsylvania. Finally, to assess the current state of economic inclusion as reflected in the labor market, gaps in Black and white outcomes are compared across US states in 2020.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133850060","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ben R. Craig, Thomas M. Phelan, Jan-Peter Siedlarek
Many models have been developed to forecast the spread of the COVID-19 virus. We present one that is enhanced to allow individuals to alter their behavior in response to the virus. We show how adding this feature to the model both changes the resulting forecast and informs our understanding of the appropriate policy response. We find that when left to their own devices, individuals do curb their social activity in the face of risk, but not as much as a government planner would. The planner fully internalizes the effect of all individuals’ actions on others in society, while individuals do not. Further, our simulations suggest that government intervention may be particularly important in the middle and later stages of a pandemic.
{"title":"Modeling Behavioral Responses to COVID-19","authors":"Ben R. Craig, Thomas M. Phelan, Jan-Peter Siedlarek","doi":"10.26509/FRBC-EC-202105","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202105","url":null,"abstract":"Many models have been developed to forecast the spread of the COVID-19 virus. We present one that is enhanced to allow individuals to alter their behavior in response to the virus. We show how adding this feature to the model both changes the resulting forecast and informs our understanding of the appropriate policy response. We find that when left to their own devices, individuals do curb their social activity in the face of risk, but not as much as a government planner would. The planner fully internalizes the effect of all individuals’ actions on others in society, while individuals do not. Further, our simulations suggest that government intervention may be particularly important in the middle and later stages of a pandemic.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125306128","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Commentary reviews evidence on three areas of concern related to the COVID-19 pandemic and education in the United States for which research currently exists. First, the evidence suggests that the spread of the COVID-19 virus at K–12 schools has been low, although it may have spread through colleges at a higher rate. Second, while anecdotal evidence suggests that school closures have reduced labor force participation, the research evidence thus far does not find much support for this situation. Third, the limited research evidence does, however, suggest the COVID-19 pandemic is negatively affecting students’ academic performance.
{"title":"COVID-19 and Education: A Survey of the Research","authors":"Peter L. Hinrichs","doi":"10.26509/FRBC-EC-202104","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202104","url":null,"abstract":"This Commentary reviews evidence on three areas of concern related to the COVID-19 pandemic and education in the United States for which research currently exists. First, the evidence suggests that the spread of the COVID-19 virus at K–12 schools has been low, although it may have spread through colleges at a higher rate. Second, while anecdotal evidence suggests that school closures have reduced labor force participation, the research evidence thus far does not find much support for this situation. Third, the limited research evidence does, however, suggest the COVID-19 pandemic is negatively affecting students’ academic performance.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"38 3","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120870802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The unemployment rate in the United States falls slowly in expansions, and it may not reach its previous low point before the next recession begins. Based on this feature, I document that the frequent recessions prior to 1983 are associated with an upward trend in the unemployment rate. In contrast, the long expansions beginning in 1983 are associated with a downward trend. I then estimate a two-variable vector autoregression (VAR) that includes the unemployment rate and a recession indicator. Long-horizon forecasts from this VAR conditioned on no future recessions project that the unemployment rate will go to 3.6 percent after a long period with no recessions.
{"title":"Recessions and the Trend in the US Unemployment Rate","authors":"Kurt G. Lunsford","doi":"10.26509/FRBC-EC-202101","DOIUrl":"https://doi.org/10.26509/FRBC-EC-202101","url":null,"abstract":"The unemployment rate in the United States falls slowly in expansions, and it may not reach its previous low point before the next recession begins. Based on this feature, I document that the frequent recessions prior to 1983 are associated with an upward trend in the unemployment rate. In contrast, the long expansions beginning in 1983 are associated with a downward trend. I then estimate a two-variable vector autoregression (VAR) that includes the unemployment rate and a recession indicator. Long-horizon forecasts from this VAR conditioned on no future recessions project that the unemployment rate will go to 3.6 percent after a long period with no recessions.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"18 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130699866","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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