Project Description
Ever wonder why the price of a haircut seems to climb every year, while the cost of a new laptop or a t-shirt often stays the same? At its simplest, economics suggests that when more money enters the economy, prices go up—a concept known as inflation. But in reality, the journey from "printing money" to the price tag on your shelf is much more complicated than a simple one-to-one increase. This project investigates how changes in the U.S. money supply affect the prices of physical goods differently than they affect local services. We use advanced statistical models to determine if money growth impacts "non-traded" domestic services like housing and education more or less than it impacts "traded" goods like food and cars, which are influenced by global markets and exchange rates. By analyzing decades of economic data, we are trying to uncover the specific "channels" that connect the Federal Reserve's decisions to the costs of daily life.
Tasks and Responsibilites
Data Management: Assisting in the construction and re-normalization of sector weights for the full sample (1967–2025)
Literature Review: Part of the literature review has already been undertaken. A more broad review will take place over the summer.
Model Estimation: The student will execute the model estimation. This will also involve robustness check and potentially extending the analysis to different countries.
Desired Qualifications
None Listed.