Along I 35 & I 90/94

James in London asks on the previous post:

…what are the equivalent charts for each of the US regional Fed’s NGDP pathways? Does the hawkish’ness of doveish’ness of the Governor reflect their own geography?

Instead of doing a full sample take, I chose two famous “hawkish districts” (Kansas City & Dallas) and two well-known “dovish districts” (Minneapolis, after Kocherlakota´s about turn, and Chicago). They are located, respectively, along I35 and I90/94, with the Minneapolis Fed intersecting both. And all are in the mid-west.

I compare NGDP in each district with the US NGDP. One could assume that the more “hawkish” districts would be experiencing nominal growth above the national rate, and vice-versa for the “dovish” districts.

As the charts show that´s not true. In each case one district has nominal growth well above the national growth while the other is growing at about the same rate as the nation.


Interestingly, the “hawkish” districts (Kansas and Dallas) got whacked harder than the nation during the crisis.


The “Dove”:

LAKE FOREST, Ill.—Federal Reserve Bank of Chicago President Charles Evans said Wednesday the Federal Reserve should hold off until early 2016 to raise interest rates, saying that acting before inflation comes more into line with the central bank’s target could hurt its credibility.

The “Hawk”:

Federal Reserve Bank of Kansas City President Esther George wants to see the U.S. central bank start raising short-term interest rates at some point over the summer, worrying that if Fed doesn’t get moving soon future rate increases may have to be more aggressive.

“I continue to support liftoff towards the middle of this year due to improvement in the labor market, expectations of firmer inflation [only if it´s her own], and the balance of risks over the medium and longer run,” Ms. George said in a speech in Kansas City, Mo.

One thought on “Along I 35 & I 90/94

  1. Thanks! Worth checking even if no strong evidence either way. Texas got hit worse, but was growing more strongly before and has grown more strongly after the crisis. Fortunately, Texas is no Germany, and doesn’t have outsize influence on monetary policy in its currency zone. Small mercies.

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