Ideas on updating older bank buildings
Analysis using microdata on earnings shows that black men and women earn persistently lower wages compared with their white counterparts and that these gaps cannot be fully explained by differences in age, education, job type, or location.Especially troubling is the growing unexplained portion of the divergence in earnings for blacks relative to whites.This raises the question of whether the wage Phillips curve—the traditional relationship between labor market slack and wage growth—has weakened.Estimating a causal link from slack to wage growth using national data is difficult.The Federal Reserve is moving towards more normal monetary policy, which means rising interest rates.But factors including the real natural rate of interest, a slower sustainable pace of growth, and inflation all point to a new normal where interest rates are lower than in the 1990s and early 2000s.Further slow growth in health-care prices is likely to remain a drag on inflation.When the Federal Reserve raises short-term interest rates, the rates on longer-term Treasuries are generally expected to rise.
The model predicts a modest decline in the ratio over the next decade.This can lead to overstating inflation and, in turn, understating economic growth.A recent estimate suggests that around 0.6 percentage point of growth is missed per year.This has the potential to limit the scope for central banks to respond to future recessionary shocks.
More than half a century since the Civil Rights Act became law, U. workers continue to experience different levels of success depending on their race.
The following is adapted from remarks by the president and CEO of the Federal Reserve Bank of San Francisco at the 54th Annual Economic Forecast, Phoenix, AZ, on November 29.