Fernando M. Martin is an economist and research officer at the Federal Reserve Bank of St. Louis. His research interests include macroeconomics, monetary economics, banking and public finance. He joined the St. Louis Fed in 2011. Read more about the author and his research.
During the 2007-08 financial crisis, the Federal Reserve stepped in to prevent a possible panic. How did this affect the U.S. financial system in later years?
U.S. budget projections through 2027 point to the challenge of meeting growing obligations from mandatory spending amid modest increases in revenue.
To get an idea of the Fed’s impact on prices and inflation, look at the data before and after its creation in 1913. Learn about the gold standard’s role, too.
The federal government and the Fed pumped a lot of liquidity into the economy in response to the Great Recession. But the usual domestic users of such liquidity—households and businesses—increased their liquidity holdings only slightly.
Now that the turmoil over the federal budget has quieted down somewhat, it’s a good time to examine how spending and revenue have changed since the 1970s and are expected to change in the next 10 years.
January’s deal on the so-called fiscal cliff only raised projected revenue moderately and continued to push the spending issue forward unresolved. The economy may have been slowed down by such a drawn-out process, as well as by the uncertainty on the future size of government and on the distribution of the tax burden.