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Econ Focus

Oct. 17, 2019

Richmond Fed’s Econ Focus Looks at Central Banks and Climate Change

Some economists believe rising temperatures and growing intensity of storms could affect the financial system in the long term. What does this mean for the Fed and for other central banks around the world? The latest issue of the Richmond Fed’s Econ Focus magazine looks at the research — and at what central banks are doing.

Also in this issue:

  • The workforce’s shrinking share of the pie. There is wide agreement that labor’s share of U.S. national income has gone down substantially over the past 20 years. But there is much less agreement about why. Economists have advanced a wide variety of explanations, including trends in automation, outsourcing, industrial concentration and labor’s bargaining power.
  • Do budget deficits matter? Federal deficits are set to reach record highs in dollar terms, but some economists (including proponents of Modern Monetary Theory) have argued that the government should be borrowing even more as long as inflation and interest rates remain low. Is there a limit to how much the United States can borrow?
  • Affordable Housing ... From Sears. From 1908 to 1940, the Sears catalog sold houses — as kits the retailer would ship and that builders or the homeowners themselves would assemble. Other manufacturers also sold kit houses. Hundreds of kits, an affordable housing option for the middle class, were built in the Fifth District alone. A relic of an earlier time, or a source of lessons for affordable housing policy?
  • Interview. Emmanuel Farhi of Harvard University discusses the rising demand for safe assets, the prospect of serious competition for the dollar as the world’s currency and how economists have misunderstood productivity trends.
  • More. Coverage of other economic issues affecting the Fifth Federal Reserve District and the nation.

For a free subscription to Econ Focus, the economics magazine of the Richmond Fed, or for copies, call (800) 322-0565 or subscribe online. The articles also are available online.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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