Search Results
Journal Article
Back to the future: prospective deficits through the prism of the past
A look at the Clinton administration's first piece of budget legislation--the Omnibus Budget Reconciliation Act of 1993 (OBRA93)--showing that although it appears to be more successful than OBRA90, its Bush administration predecessor, it may still be subject to the same type of unanticipated "technical" problems that undermined the earlier legislation.
Firms Expect Working from Home to Triple
The coronavirus and efforts to mitigate its impact are having a transformative impact on many aspects of economic life, intensifying trends like shopping online rather than visiting brick-and-mortar stores and increasing the incidence of working from home. Indeed, many tech giants have already made working from home a permanent option for employees.
Working Paper
Economic Uncertainty before and during the COVID-19 Pandemic
We consider several economic uncertainty indicators for the United States and the UK before and during the COVID-19 pandemic: implied stock market volatility, newspaper-based economic policy uncertainty, twitter chatter about economic uncertainty, subjective uncertainty about future business growth, and disagreement among professional forecasters about future gross domestic product growth. Three results emerge. First, all indicators show huge uncertainty jumps in reaction to the pandemic and its economic fallout. Indeed, most indicators reach their highest values on record. Second, peak ...
Journal Article
Can conventional theory explain the unconventional recovery?
An argument that the sluggishness of the current economic recovery reflects a permanent, structural change in the economy that may not be easily addressed using the standard monetary/fiscal incentives called for in the conventional view of business cycles, and that structural adjustment is a critical component of all economic fluctuations.
Journal Article
Okun's law revisited: should we worry about low unemployment?
A review of the connection between labor resource utilization and the growth/unemployment correlation summarized by Okun's law, showing that the instability of that relationship, particularly over short time horizons, has important implications for monetary policy.
Conference Paper
Introduction: Recent developments in monetary economics
Working Paper
Firm-specific capital, nominal rigidities and the business cycle
This paper formulates and estimates a three-shock US business cycle model. The estimated model accounts for a substantial fraction of the cyclical variation in output and is consistent with the observed inertia in inflation. This is true even though firms in the model reoptimize prices on average once every 1.8 quarters. The key feature of our model underlying this result is that capital is firm-specific. If we adopt the standard assumption that capital is homogeneous and traded in economy-wide rental markets, we find that firms reoptimize their prices on average once every 9 quarters. We ...
Working Paper
Firm-specific capital, nominal rigidities, and the business cycle
Macroeconomic and microeconomic data paint conflicting pictures of price behavior. Macroeconomic data suggest that inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model which resolves this apparent micro - macro conflict. Our model is consistent with post-war U.S. evidence on inflation inertia even though firms re-optimize prices on average once every 1.5 quarters. The key feature of our model is that capital is firm-specific and predetermined within a period.
Journal Article
A simple proposal for privatizing Social Security
An argument that shifting to a privatized, funded and contribution-based Social Security system could provide undiminished benefits to current retirees while simultaneously preserving the promise of a secure retirement for today's workers and their descendants.
Working Paper
Social Security privatization: a simple proposal
A proposal for a U.S. Social Security reform that gradually, but ultimately fully, privatizes the system. This proposal follows the no-harm, no-foul principle in that it preserves the benefits of older generations and yet promises the same or higher retirement benefits for the young.