Glenn Rudebusch

This site provides all of my published and forthcoming research, as listed in my cv. Additional author pages are available on Google Scholar, RePEc, and ResearchGate.

Short bio: Glenn Rudebusch is a nonresident Senior Fellow at the Brookings Institution with the Hutchins Center on Fiscal & Monetary Policy, a Research Fellow at the Centre for Economic Policy Research (CEPR) in the Climate Change and Environment programme, and a Visiting Scholar at New York University in the Volatility and Risk Institute of the Stern School of Business. Previously, Dr. Rudebusch spent several decades in Economic Research at the Federal Reserve Board and the Federal Reserve Bank of San Francisco, where he served most recently as Executive Vice President and Senior Policy Advisor. Among other tasks, he directed economic research, provided analysis and advice on monetary policy, financial developments, and macroeconomic forecasts, and regularly attended Federal Open Market Committee (FOMC) monetary policy meetings. Dr. Rudebusch has published over a hundred academic and policy papers on a variety of issues in macroeconomic dynamics and forecasting, monetary policy strategy and communication, and financial models of interest rates in journals including the American Economic Review, Journal of Political EconomyJournal of Monetary Economics, and Review of Finance. Dr. Rudebusch played a key role in introducing climate change considerations into the Federal Reserve’s analysis, research, and policy. He has authored numerous articles on the economics of climate change and the associated financial risk including merging macro-finance considerations into assessments of the economic costs of climate change. He also established the Virtual Seminar on Climate Economics in 2020 (as described in this VoxEU/CEPR interview).

Contact: glenn.rudebusch at gmail.com

Curriculum Vitae

 

Climate Economics and Climate Finance Research

I have authored numerous articles in climate economics and climate finance.  This research has been focused on the economic implications of climate change, the associated financial risk, and how statistical techniques can complement climate models in projecting climate change.

“Green stocks and monetary policy shocks: Evidence from Europe.” Working paper, 2024. (with Bauer et al.)

“The effect of US climate policy on financial markets: An event study of the Inflation Reduction Act.” Working paper, 2023, forthcoming in Advances in Econometrics. (with Bauer et al.)

“Climate policy curves highlight key mitigation choices.” Climate Policy, 2024, 1–7. (with Hänsel et al.)

“Why the Fed and ECB Parted Ways on Climate Change: The Politics of Divergence in the Global Central Banking Community.” Working paper, 2023. (with DiLeo et al.)

The Rising Cost of Climate Change: Evidence from the Bond Market.” The Review of Economics and Statistics 105 (5), 2023, 1255–1270. (with Michael Bauer)

“US benefit-cost analysis requires revision,” Science, May 25, 2023, Vol 380, Issue 6647, p. 803, DOI: 10.1126/science.adi5943. (with others)

“Climate Models Underestimate the Sensitivity of Arctic Sea Ice to Carbon Emissions.” Energy Economics 126, 2023, 107012. (with Frank Diebold)

“When Will Arctic Sea Ice Disappear? Projections of Area, Extent, Thickness, and Volume.” Journal of Econometrics 236, 2023, 105479. (with Diebold et al.)

“Probability Assessments of an Ice-Free Arctic: Comparing Statistical and Climate Model Projections.” Journal of Econometrics 231 (2), December 2022, pp. 520-534. (with Frank Diebold)

Where is the Carbon Premium? Global Performance of Green and Brown Stocks.Journal of Climate Finance 1, December 2022, 100006. (with Bauer et al.)

“Climate Policy Curves: Linking Policy Choices to Climate Outcomes.” Working paper, 2022. (with Hänsel et al.)

“Climate Change Is a Source of Financial Risk.” In Climate Change: Managing the Financial Risk and Funding the Transition, ed. by Jing Zhang, Risk Books, 2022, pp. 41-48.

“On the Evolution of US Temperature Dynamics.” In Essays in Honor of M. Hashem Pesaran: Prediction and Macro Modeling (Advances in Econometrics, Vol. 43A), ed. by Chudik, Hsiao, and Timmermann, Emerald Publishing Limited, 2022, pp. 9-28. (with Frank Diebold)

“Climate Change Costs Rise as Interest Rates Fall.” FRBSF Economic Letter 2021-28, October 20, 2021. (with Bauer)

“Climate Change Is a Source of Financial Risk.” FRBSF Economic Letter 2021-03, February 8, 2021.

“The Economics of Climate Change: A First Fed Conference.” FRBSF Economic Letter 2019-31, December 16, 2019. (with Hale and Jorda)

“Climate Change and the Federal Reserve.” FRBSF Economic Letter 2019-09, March 25, 2019.

In 2020, I helped establish the Virtual Seminar on Climate Economics to help foster and promote academic research into the economics and finance of climate change (as described in this VoxEU/CEPR interview).  This seminar series is particularly useful because climate economics is ill-suited to the usual academic compartmentalization, as climate considerations cut across macro, micro, finance, econometrics, and international, environmental, development, and energy economics.

All Research

“Green stocks and monetary policy shocks: Evidence from Europe.” Working paper, 2024. (with Bauer et al.)

“The effect of US climate policy on financial markets: An event study of the Inflation Reduction Act.” Working paper, 2023, forthcoming in Advances in Econometrics. (with Bauer et al.)

“Climate policy curves highlight key mitigation choices.” Climate Policy, 2024, 1–7. (with Hänsel et al.)

“Why the Fed and ECB Parted Ways on Climate Change: The Politics of Divergence in the Global Central Banking Community.” Working paper, 2023. (with DiLeo et al.)

The Rising Cost of Climate Change: Evidence from the Bond Market.” The Review of Economics and Statistics 105 (5), 2023, 1255–1270. (with Michael Bauer)

“US benefit-cost analysis requires revision,” Science, May 25, 2023, Vol 380, Issue 6647, p. 803, DOI: 10.1126/science.adi5943. (with others)

“Climate Models Underestimate the Sensitivity of Arctic Sea Ice to Carbon Emissions.” Energy Economics 126, 2023, 107012. (with Frank Diebold)

“When Will Arctic Sea Ice Disappear? Projections of Area, Extent, Thickness, and Volume.” Journal of Econometrics 236, 2023, 105479. (with Diebold et al.)

“Probability Assessments of an Ice-Free Arctic: Comparing Statistical and Climate Model Projections.” Journal of Econometrics 231 (2), December 2022, pp. 520-534. (with Frank Diebold)

Where is the Carbon Premium? Global Performance of Green and Brown Stocks.Journal of Climate Finance 1, December 2022, 100006. (with Bauer et al.)

“Climate Policy Curves: Linking Policy Choices to Climate Outcomes.” Working paper, 2022. (with Hänsel et al.)

“Climate Change Is a Source of Financial Risk.” In Climate Change: Managing the Financial Risk and Funding the Transition, ed. by Jing Zhang, Risk Books, 2022, pp. 41-48.

“On the Evolution of US Temperature Dynamics.” In Essays in Honor of M. Hashem Pesaran: Prediction and Macro Modeling (Advances in Econometrics, Vol. 43A), ed. by Chudik, Hsiao, and Timmermann, Emerald Publishing Limited, 2022, pp. 9-28. (with Frank Diebold)

“Interest Rates under Falling Stars.” American Economic Review 110 (5), May 2020, pp. 1316–1354. (with Michael Bauer)

“A New Normal for Interest Rates? Evidence from Inflation-Indexed Debt.” The Review of Economics and Statistics 101(5), December 2019, pp. 933–949. (with Jens Christensen)

“Term Structure Analysis with Big Data: One-Step Estimation Using Bond Prices.” Journal of Econometrics 212 (1), September 2019, pp. 26-46. (with Martin Andreasen and Jens Christensen)

“Resolving the Spanning Puzzle in Macro-Finance Term Structure Models.” Review of Finance 21 (2), March 2017, pp. 511-553. (with Michael Bauer)

“Monetary Policy Expectations at the Zero Lower Bound.” Journal of Money, Credit, and Banking 48 (7), October 2016, pp. 1439-1465. (with Michael Bauer)

“Modeling Yields at the Zero Lower Bound: Are Shadow Rates the Solution?” In Dynamic Factor Models (Advances in Econometrics, Vol. 35), ed. by Eric Hillebrand and Siem Jan Koopman, Emerald Publishing Group, 2016. pp. 75-125. (with Jens H. E. Christensen)

“Pricing Deflation Risk with U.S. Treasury Yields.” Review of Finance 20 (3), May 2016, pp. 1107-1152. (with Jens H. E. Christensen and Jose Lopez)

“A Wedge in the Dual Mandate: Monetary Policy and Long-Term Unemployment.” Journal of Macroeconomics 47A, March 2016, pp. 5-18. (with John C. Williams)

“A Probability-Based Stress Test of Federal Reserve Assets and Income.” Journal of Monetary Economics 73, July 2015, pp. 26-43. (with Jens H. E. Christensen and Jose Lopez)

“Estimating Shadow-Rate Term Structure Models with Near-Zero Yields.” Journal of Financial Econometrics 13 (2), Spring 2015, pp. 226-259. (with Jens H. E. Christensen)

“The Signaling Channel for Federal Reserve Bond Purchases.” International Journal of Central Banking 10(3), September 2014, 233-289. (with Michael D. Bauer)

“Do Central Bank Liquidity Facilities Affect Interbank Lending Rates?” Journal of Business and Economic Statistics 32(1), January 2014, 136-151. (with Jens H. E. Christensen and Jose Lopez)

“Term Premia and Inflation Uncertainty: Empirical Evidence from an International Panel Dataset: Comment.” American Economic Review 104(1), January 2014, 323–337. (with Michael D. Bauer and Jing Cynthia Wu)

“Discussion of ‘Complexity and Monetary Policy.’” International Journal of Central Banking 9(S1), January 2013, 219-228.

“Extracting Deflation Probability Forecasts from Treasury Yields.” International Journal of Central Banking 8(4), December 2012, 21-60. (with Jens H. E. Christensen and Jose Lopez)

“The Response of Interest Rates to U.S. and U.K. Quantitative Easing.” Economic Journal 122, November 2012, F385-F414. (with Jens H. E. Christensen)

“Correcting Estimation Bias in Dynamic Term Structure Models.” Journal of Business and Economic Statistics 30, July 2012, 454-467. (with Michael D. Bauer and Jing Cynthia Wu)

“The Bond Premium in a DSGE Model with Long-Run Real and Nominal Risks.” American Economic Journal: Macroeconomics 4, January 2012, pp. 105-43. (with Eric Swanson)

“The Affine Arbitrage-Free Class of Nelson-Siegel Term Structure Models.” Journal of Econometrics 164, September 2011, pp. 4-20. (with Jens H. E. Christensen and Francis X. Diebold)

“Inflation Expectations and Risk Premiums in an Arbitrage-Free Model of Nominal and Real Bond Yields.” Journal of Money, Credit, and Banking 42, September 2010, pp. 143-178. (with Jens H. E. Christensen and Jose A. Lopez)

“Macro-Finance Models of Interest Rates and the Economy.” The Manchester School 78, 2010, pp. 25-52.

“An Arbitrage-Free Generalized Nelson-Siegel Term Structure Model.” Econometrics Journal 12, November 2009, pp. 33-64. (with Jens H. E. Christensen and Francis X. Diebold)

“Forecasting Recessions: The Puzzle of the Enduring Power of the Yield Curve.” Journal of Business and Economic Statistics 27, October 2009, pp. 492-503. (with John C. Williams)

“Examining the Bond Premium Puzzle with a DSGE Model.” Journal of Monetary Economics 55, October 2008, pp. 111-126. (with Eric Swanson)

“Revealing the Secrets of the Temple: The Value of Publishing Central Bank Interest Rate Projections.” in Asset Prices and Monetary Policy, ed. by J.Y. Campbell, 2008, Chicago: University of Chicago Press, pp. 247-284. (with John C. Williams)

“A Macro-Finance Model of the Term Structure, Monetary Policy, and the Economy.” Economic Journal 118, July 2008, pp. 906-926. (with Tao Wu)
Awarded annual Royal Economic Society prize for the best paper published in the Economic Journal.

“Macroeconomic Implications of Changes in the Term Premium.” Review, Federal Reserve Bank of St. Louis, 2007, July/August, 89(4), pp. 241-269. (with Brian Sack and Eric Swanson)

“Discussion of ‘Cracking the Conundrum.’” Brookings Papers on Economic Activity, 2007(1), pp. 317-329.

“Accounting for a Shift in Term Structure Behavior with No-Arbitrage and Macro-Finance Models.” Journal of Money, Credit, and Banking 39 (2-3), March 2007, pp. 395-422. (with Tao Wu)

“The Bond Yield ‘Conundrum’ from a Macro-Finance Perspective.” Monetary and Economic Studies 24(S-1), December 2006, pp. 83-128. (with Eric Swanson and Tao Wu)

“Monetary Policy Inertia: Fact or Fiction?” International Journal of Central Banking 2(4), December 2006, pp. 85-135.
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“The Macroeconomy and the Yield Curve: A Dynamic Latent Factor Approach.” Journal of Econometrics 131, March-April 2006, pp. 309-338. (with Francis X. Diebold and S. Boragan Aruoba)

“Using a Long-Term Interest Rate as the Monetary Policy Instrument.” Journal of Monetary Economics 52, July 2005, pp. 855-879. (with Bruce McGough and John C. Williams)​

“Modeling Bond Yields in Finance and Macroeconomics.” American Economic Review, Papers and Proceedings 95, May 2005, pp. 415-420. (with Francis X. Diebold and Monika Piazzesi)

“Assessing the Lucas Critique in Monetary Policy Models.” Journal of Money, Credit, and Banking 37, April 2005, pp. 245-272.
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“Estimating the Euler Equation for Output.” Journal of Monetary Economics 51, September 2004, pp. 1133-1153. (with Jeffrey Fuhrer)

“Term Structure Evidence on Interest Rate Smoothing and Monetary Policy Inertia.” Journal of Monetary Economics 49, September 2002, pp. 1161-1187.

“Assessing Nominal Income Rules for Monetary Policy with Model and Data Uncertainty.” Economic Journal 112, April 2002, pp. 402-432.

“Eurosystem Monetary Targeting: Lessons from U.S. Data.” European Economic Review 46, 2002, pp. 417-442. (with Lars Svensson)

“Is the Fed Too Timid? Monetary Policy in an Uncertain World.” Review of Economics and Statistics 83, May 2001, pp. 203-217.

“Five Questions About Business Cycles.” Economic Review, Federal Reserve Bank of San Francisco, 2001, pp. 1-15. (with Francis X. Diebold)

“Opportunistic and Deliberate Disinflation Under Imperfect Credibility.” Journal of Money, Credit, and Banking 32, November 2000, pp. 707-721. (with Antulio Bomfim)

“Policy Rules for Inflation Targeting.” in Monetary Policy Rules, ed. by J. Taylor, 1999, University of Chicago Press: Chicago, pp. 203-246. (with Lars Svensson)

“Do Measures of Monetary Policy in a VAR Make Sense?” International Economic Review 39, November 1998, pp. 907-931.
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“Do Measures of Monetary Policy in a VAR Make Sense? A Reply to Christopher A. Sims.” International Economic Review 39, November 1998, pp. 943-948.

“Taylor’s Rule and the Fed: 1970-1997.” Economic Review, Federal Reserve Bank of San Francisco, 1998, No. 3, pp. 3-16. (with John Judd)

“Monetary Policy and the Term Structure of Interest Rates: An Overview of Some Recent Research.” in Monetary Policy and Interest Rates, ed. by I. Angeloni and R. Rovelli, 1998, St. Martin’s Press: New York, pp. 263-271.

“Judging Instrument Relevance in Instrumental Variables Estimation.” International Economic Review 37, May 1996, pp. 283-298. (with Alastair Hall and David Wilcox)

“Is There a Broad Credit Channel for Monetary Policy?” Economic Review, Federal Reserve Bank of San Francisco, 1996, No. 1, pp. 3-13. (with Steve Oliner)

“Monetary Policy and Credit Conditions: Evidence from the Composition of External Finance: Comment.” American Economic Review 86, March 1996, pp. 300-309. (with Steve Oliner)

“Measuring Business Cycles: A Modern Perspective.” Review of Economics and Statistics 78, February 1996, pp. 67-77. (with Francis X. Diebold)

“The Lucas Critique Revisited: Assessing the Stability of Empirical Euler Equations for Investment.” Journal of Econometrics 70, January 1996, pp. 291-316. (with Steve Oliner and Dan Sichel)

“Is There a Bank Lending Channel for Monetary Policy?” Economic Review, Federal Reserve Bank of San Francisco, 1995, No. 2, pp. 3-20. (with Steve Oliner)

“New and Old Models of Business Investment: A Comparison of Forecasting Performance.” Journal of Money, Credit, and Banking 27, August 1995, pp. 806-826. (with Steve Oliner and Dan Sichel)

“Federal Reserve Interest Rate Targeting, Rational Expectations, and the Term Structure.” Journal of Monetary Economics 24, April 1995, pp. 245-274.

“A Comment on ‘Rational Expectations and the Economic Consequences of Changes in Regime.” in Macroeconometrics: Developments, Tensions, and Prospects, ed. by K. Hoover, 1995, Kluwer Academic Press: Boston, pp. 345-349.

“The Uncertain Unit Root in Real GNP.” The American Economic Review 83, March 1993, pp. 264-272.

“Further Evidence on Business-Cycle Duration Dependence.” in Business Cycles, Indicators, and Forecasting, ed. by M. Watson and J. Stock, 1993, University of Chicago Press for the NBER, pp. 255-280. (with Francis X. Diebold and Dan Sichel)

“Sources of the Financing Hierarchy for Business Investment.” The Review of Economics and Statistics 74, November 1992, pp. 643-654. (with Steve Oliner)

“Have Postwar Economic Fluctuations Been Stabilized?” The American Economic Review 82, September 1992, pp. 993-1005. (with Francis X. Diebold)

“Trends and Random Walks in Macroeconomic Time Series: A Re-examination,” International Economic Review 33, August 1992, pp. 661-680.

“Forecasting Output with the Composite Leading Index: A Real-Time Analysis.” Journal of the American Statistical Association 86, September 1991, pp. 603-610. (with Francis X. Diebold)

“On the Power of Dickey-Fuller Tests Against Fractional Alternatives.” Economics Letters 35, 1991, pp. 155-160. (with Francis X. Diebold)

“Is Consumption Too Smooth? Long Memory and the Deaton Paradox.” The Review of Economics and Statistics 73, February 1991, pp. 1-9. (with Francis X. Diebold)

“Shorter Recessions and Longer Expansions.” Business Review, Federal Reserve Bank of Philadelphia, November-December 1991, pp. 13-20. (with Francis X. Diebold)

“Turning Point Prediction With the Composite Leading Index: An Ex Ante Analysis.” in Leading Economic Indicators: New Approaches and Forecasting Records, ed. by K. Lahiri and G.H. Moore, 1991, Cambridge University Press, pp. 231-256. (with Francis X. Diebold)

“A Nonparametric Investigation of Duration Dependence in the American Business Cycle.” Journal of Political Economy 98, June 1990, pp. 596-616. (with Francis X. Diebold)

“Long Memory and Persistence in Aggregate Output.” Journal of Monetary Economics 24, September 1989, pp. 189-209. (with Francis X. Diebold)

“An Empirical Disequilibrium Model of Labor, Consumption, and Investment in the United States.” International Economic Review 30, August 1989, pp. 633-654.

“Scoring the Leading Indicators.” Journal of Business 62, July 1989, pp. 369-391. (with Francis X. Diebold)

“Are Productivity Fluctuations Due to Real Supply Shocks?” Economics Letters 27, 1988, pp. 327-331.

“Stochastic Properties of Revisions in the Index of Leading Indicators.” Proceedings of the American Statistical Association, Business and Economic Statistics Section, 1987, pp. 712-717, Washington, DC: American Statistical Association. (with Francis X. Diebold)

“Testing for Labor Market Equilibrium with an Exact Excess Demand Disequilibrium Model.” The Review of Economics and Statistics 68, August 1986, pp. 468-476.

Books

Yield Curve Modeling and Forecasting: The Dynamic Nelson-Siegel Approach. 2013, Princeton University Press: Princeton. (with Francis X. Diebold)

Business Cycles: Durations, Dynamics, and Forecasting. 1999, Princeton University Press: Princeton. (with Francis X. Diebold)

The Estimation of Macroeconomic Disequilibrium Models with Regime Classification Information. 1987, Springer-Verlag: New York.

FRBSF Economic Letters

“Climate Change Costs Rise as Interest Rates Fall.” October 20, 2021. (with Bauer)
“Climate Change Is a Source of Financial Risk.” February 8, 2021.
“The Economics of Climate Change: A First Fed Conference.” December 16, 2019. (with Hale and Jorda)
“Climate Change and the Federal Reserve.” March 25, 2019.
“New Evidence for a Lower New Normal in Interest Rates.” June 19, 2017. (with Christensen)
“Why Are Long-Term Interest Rates So Low?” December 5, 2016. (with Bauer)
“Has the Fed Fallen behind the Curve This Year?” November 7, 2016. (with Nechio)
“Will the Economic Recovery Die of Old Age?” February 8, 2016.
“Residual Seasonality and Monetary Policy.” August 24, 2015. (with Wilson and Pyle)
“The Puzzle of Weak First-Quarter GDP Growth.” May 18, 2015. (with Wilson and Mahedy)
“Optimal Policy and Market-Based Expectations.” April 13, 2015. (with Bauer)
“Does Slower Growth Imply Lower Interest Rates?” November 10, 2014. (with Leduc)
“Stress Testing the Fed.” March 24, 2014. (with Christensen and Lopez)
“Expectations for Monetary Policy Liftoff.” November 18, 2013. (with Bauer)
“What Caused the Decline in Long-term Yields?” July 8, 2013. (with Bauer)
“Signals from Unconventional Monetary Policy.” November 21, 2011. (with Bauer)
“The Fed’s Interest Rate Risk.” April 11, 2011.
“The Fed’s Exit Strategy for Monetary Policy.” June 14, 2010.
“Inflation: Mind the Gap.” January 19, 2010. (with Liu)
“Disagreement about the Inflation Outlook.” October 5, 2009. (with Leduc and Weidner)
“The Fed’s Monetary Policy Response to the Current Crisis.” May 22, 2009.
“Publishing Central Bank Interest Rate Forecasts.” January 25, 2008.
“Publishing FOMC Economic Forecasts.” January 18, 2008.
“Monetary Policy Inertia and Recent Fed Actions.” January 26, 2007.
“Monetary Policy and Asset Price Bubbles.” August 5, 2005.
“Finance and Macroeconomics.” May 2, 2003. (with Richard Dennis)
“Macroeconomic Models for Monetary Policy.” April 19, 2002. (with Tao Wu)
“Has a Recession Already Started?” October 19, 2001.
“How Sluggish Is the Fed?” March 2, 2001.
“Structural Change and Monetary Policy.” April 28, 2000.
“How Fast Can the New Economy Grow?” February 25, 2000.
“Monetary Policy and Monetary Institutions.” April 16, 1999.
“How Did the Economy Surprise Us in 1998?” March 5, 1999.
“The Goals of U.S. Monetary Policy.” January 29, 1999. (with John Judd)
“Describing Fed Behavior.” December 25, 1998. (with John Judd)
“U.S. Inflation Targeting: Pro and Con.” May 29, 1998. (with Carl Walsh)
“Central Bank Inflation Targeting.” May 22, 1998. (with Carl Walsh)
“Interest Rates and Monetary Policy.” June 13, 1997.
“Is Opportunistic Monetary Policy Credible?” October 4, 1996.
“New Estimates of the Recent Growth in Potential Output.” November 24, 1995.
“Federal Reserve Policy and the Predictability of Interest Rates.” June 23, 1995.
“What Are the Lags in Monetary Policy?” February 3, 1995.