Chicago Fed Letter
How Interconnected Are Cryptocurrencies and What Does This Mean for Risk Measurement?
In the past couple of years, the market for digital currencies, commonly known as cryptocurrencies because transactions are verified using cryptography, has expanded significantly in terms of transaction volumes, market capitalization, and the number of digital currencies in existence. On January 1, 2018, the market capitalizations (market caps1) of Bitcoin and Ethereum were $226 billion and $75 billion, respectively. By May 10, 2021, Bitcoin’s market cap had reached almost $1 trillion and Ethereum’s $478 billion.
The Effects of the “Great Resignation” on Labor Market Slack and Inflation
Renato Faccini, Leonardo Melosi, Russell Miles
Research has established a strong and positive relationship between the share of employed workers quitting their jobs (quit rate) and the rate of wage and price inflation. Periods of time when the quit rate increases often predate periods of higher inflation. This positive relationship between quit rate and inflation may be surprising at first, because we might expect that a higher propensity of employed workers to search for new jobs would expand the supply of labor, lowering labor costs.
What Drives Gold Prices?
Craig Epstein, Adrian Lafont-Mueller, Robert Barsky, Younggeun Yoo
A half century after gold ceased to play a significant formal role in the international monetary system, it still captures a great deal of attention in the financial press and the popular imagination. Yet there has been very little scrutiny of the primary factors determining the price of gold since its dollar price was first allowed to vary freely in 1971. In this article, we attempt to fill in that gap by highlighting three considerations that are commonly cited as drivers of gold prices: inflationary expectations, real interest rates, and pessimism about future macroeconomic conditions.
Bank Exposure to Commercial Real Estate and the Covid-19 Pandemic
Kyle Binder, Alejandro H. Drexler, Emily Greenwald, and Sam Schulhofer-Wohl
The Covid-19 pandemic had an immediate and substantial impact on the commercial real estate (CRE) market—emptying workplaces, shopping centers, and hotels, thus affecting the cash flows of businesses occupying commercial space and in turn the ability of commercial space owners to meet their debt obligations.
