Search Results
Conference Paper
Cyclical movements along the labor supply function
A consensus in macroeconomics holds that the observed higher-frequency movements in employment and hours of work are movements along a labor-supply function caused by shifts of the labor demand function. Recent theoretical thinking has extended this view to include fluctuations in unemployment, so that macroeconomists can speak coherently of movements along an unemployment function caused by shifts in labor demand.
Conference Paper
The value of life and the rise in health spending
Health care extends life. Over the past half century, Americans spent a rising share of total economic resources on health and enjoyed substantially longer lives as a result. Debate on health policy often focuses on limiting the growth of health spending. We investigate an issue central to this debate: Is the growth of health spending the rational response to changing economic conditions - notably the growth of income per person? We develop a model based on standard economic assumptions and argue that this is indeed the case. Standard preferences - of the kind used widely in economics to ...
Conference Paper
The stock market and capital accumulation
The value of a firm's securities measures the value of the firm's productive assets. If the assets include only capital goods and not a permanent monopoly franchise, the value of the securities measures the value of the capital. Finally, if the price of the capital can be measured or inferred, the quantity of the firm's capital is the value divided by the price. A standard model of adjustment costs enables the inference of the price of installed capital. I explore the implications of the proposition using data from U.S. non-farm, non-financial corporations over the past 50 years. The data ...
Conference Paper
Monetary strategy with an elastic price standard
Journal Article
Trading Off Consumption and COVID-19 Deaths
This note develops a framework for thinking about the following question: What is the maximum amount of consumption that a utilitarian welfare function would be willing to trade off to avoid the deaths associated with COVID-19? The answer depends crucially on the mortality rate associated with the coronavirus. If the mortality rate averages 0.81%, as projected in one prominent study, our answer is 41% of one year's consumption. If the mortality rate instead averages 0.44% across age groups, as suggested by a recent seroprevalence study, our answer is 28%.
Conference Paper
Monetary policy in the information economy : commentary
Journal Article
The Disappointing Recovery in U.S. Output after 2009
U.S. output has expanded only slowly since the recession trough in 2009, counter to normal expectations of a rapid cyclical recovery. Removing cyclical effects reveals that the deep recession was superimposed on a sharply slowing trend in underlying growth. The slowing trend reflects two factors: slow growth of innovation and declining labor force participation. Both of these powerful adverse forces were in place before the recession and, thus, were not the result of the financial crisis or policy changes since 2009.
Working Paper
Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Jobseekers
Matching efficiency is the productivity of the process for matching jobseekers to available jobs. Job-finding is the output; vacant jobs and active jobseekers are the inputs. Measurement of matching efficiency follows the same principles as measuring a Hicks-neutral index of productivity of production. We develop a framework for measuring matching productivity when the population of jobseekers is heterogeneous. The efficiency index for each type of jobseeker is the monthly job-finding rate for the type adjusted for the overall tightness of the labor market. We find that overall matching ...
Conference Paper
Separating the business cycle from other economic fluctuations
Working Paper
The Active Role of the Natural Rate of Unemployment
We propose that the natural rate of unemployment may have an active role in the business cycle, in contrast to a widespread view that the rate is fairly smooth and at most only weakly cyclical. We demonstrate that the tendency to treat the natural rate as near-constant would explain the surprisingly low slope of the Phillips curve. We observe that evidence is weak about this basic point–the evidence neither comes close to rejecting the conventional view nor does it reject a very different view in which fluctuations in the natural rate are associated with a substantial fraction of cyclical ...