through mid - 1995 also encouraged a substantial increase in direct investment inflows from japan. in retrospect, it is clear that more investment monies flowed into these economies than could be profitably employed at modest risk. i suspect that it was inevitable in those conditions of low inflation, rapid growth, and ample liquidity that much investment moved into the real estate sector, with an emphasis by both the public and private sectors on conspicuous construction projects. this is an experience, of course, not unknown in the united states on occasion. these real estate assets, in turn, ended up as collateral for a significant proportion of the assets of domestic financial systems. in many instances, those financial systems were less than robust, beset with problems of lax lending standards, weak supervisory regimes, and inadequate capital. moreover, in most cases, the currencies of these economies were closely tied to the u. s. dollar, and the dollar ’ s substantial recovery since mid - 1995, especially relative to the yen, made their exports less competitive. in addition, in some cases, the glut of semiconductors in 1996 suppressed export growth, exerting further pressures on highly leveraged businesses. however, overall gdp growth rates generally edged off only slightly, and imports, fostered by rising real exchange rates, continued to expand, contributing to what became unsustainable current account deficits in a number of these economies. moreover, with exchange rates seeming to be solidly tied to the dollar, and with dollar and yen interest rates lower than domestic currency rates, a significant part of the enlarged capital inflows into these economies, in particular short - term flows, was - 2denominated by the ultimate borrowers in foreign currencies. this put additional pressure on companies to earn foreign exchange through exports. the pressures on fixed exchange rate regimes mounted as foreign investors slowed the pace of new capital inflows, and domestic businesses sought increasingly to convert domestic currencies into foreign currencies, or, equivalently, slowed the conversion of export earnings into domestic currencies. the shifts in perceived future investment risks led to sharp declines in stock markets across asia, often on top of earlier declines or lackluster performances. to date, the direct impact of these developments on the american economy has been modest, but it can be expected not to be negligible. u. s. exports to thailand, the philippines, indonesia, and malaysia ( the four countries initially affected ) were about

lisa d cook : important questions for economic research speech by ms lisa d cook, member of the board of governors of the federal reserve system, at the carroll round keynote speech, georgetown university mcdonough school of business, washington dc, 21 april 2023. * * * good evening. thank you for the invitation to speak at the carroll round this year. 1 economics, like any other discipline, has its own established canon and set of rules and models. but it is also constantly evolving, growing, and changing shape. new approaches and methods are developed. unique forces arise and long - established behaviors can change - - as we have seen over the past three years, and even the past decade. there will always be unasked questions and new trails to blaze. and, as in any field, the people who make up the profession lie at the heart of its growth and progress. it is a pleasure to be here today among such a talented group of future economists. your research reflects everything that is exciting about the discipline. because you have interesting theses. because you have used an impressive variety of data sets and models. and because you have a perspective that is unique to your generation and experiences. as you know, i was a professor of economics and international relations at michigan state university for nearly two decades before joining the board of governors. among my favorite courses to teach were undergraduate research courses. it was magical to see the novel ways that students brought new ideas, literature, models, methods, and data to the most pressing problems of the day. i see some of that magic in the research represented here this evening. in keeping with that spirit of inquiry, i would like to talk today about some of the open questions i see for understanding the economic outlook and for setting monetary policy. i will also focus on some of the data sources i find valuable for answering those questions. inflation for monetary policy, the foremost questions currently are about the inflation process. the pandemic - related economic shutdown created rapid shifts in demand, which continued through the reopening process and reflected people's wants and needs during that time. for instance, there was a sharp move away from in - person services and toward goods. this was coupled with disruptions to supply, both in global supply chains and the labor force. russia's invasion of ukraine last year further restricted access to commodities, and the subsequent surge in energy prices drove a spike in consumer price inflation to a peak in mid - 2022,