Search Results
Working Paper
Supply-side sources of inflation: evidence from OECD countries.
We evaluate the merits of the "supply-side" view under which inflation results from sectoral shocks, and compare it with the "classical" view in which inflation results from aggregate factors such as variations in money growth. Using a panel VAR methodology applied to data for 13 GECD countries, we find support for a multi-shock view of inflation: supply-side shocks are statistically significant determinants of inflation, even after taking into account aggregate demand factors. While oil prices are the dominant supply-side influence, other measures such as the skewness of relative price ...
Conference Paper
New evidence on cyclical and structural sources of unemployment
Working Paper
Minimum wages and firm employment: evidence from China
This paper studies how minimum wage policies affect firm employment in China using a unique county level minimum wage data set matched to disaggregated firm survey data. We investigate both the effect of imposing a minimum wage, and the effect of the policies that tightened enforcement in 2004. We find that the average effect of minimum wage changes is modest and positive, and that there is a detectable effect after enforcement reform. Firms have heterogeneous responses to minimum wage changes which can be accounted for by differences in their wage levels and profit margins: firms with high ...
Working Paper
The effect of changes in reserve requirements on investment and GNP
This paper provides evidence on the importance of the credit channel in the transmission of monetary policy. Changes in reserve requirements are used to measure "credit shocks." Reserve requirement changes are often made for regulatory reasons, and hence provide a more exogenous measure of credit shocks than the measures used in previous tests. To distinguish between the "money" and "credit" channels, the significance of the reserve requirements variable is studied in an empirical model that includes other monetary aggregates (either the monetary base or M1). We find that an increase in ...
Journal Article
Predicting when the economy will turn
Journal Article
Explaining unemployment: sectoral vs aggregate shocks
We include a stock market-based measure of sectoral shocks in a small VAR to examine the role played by these shocks in explaining the behavior of the unemployment rate. Sectoral shocks explain a significant proportion of the variation in the unemployment rate - especially the long-duration unemployment rate - even though other kinds of shocks (such as shocks to monetary policy, defense expenditures, and oil prices) are allowed to affect the unemployment rate. A historical decomposition reveals that recession, and they explain only a modest part of the rise in unemployment over the 1990 ...
Working Paper
Was China the first domino? assessing links between China and the rest of emerging Asia.
We assess links between China and the rest of emerging Asia. Some commentators have argued that China?s apparent devaluation in 1994 may have contributed to the Asian financial crisis. We argue that the devaluation was not economically important: The more-relevant exchange rate was a floating rate that was not devalued, and high Chinese inflation has led to a very sharp real appreciation of the currency. Although in principle, export competition with China could nevertheless have placed pressure on other Asian exporters, we argue that the striking feature of the data is the common movement ...
Journal Article
Labor market fluctuations in Japan and the U.S.--how similar are they?
This article examines the sources of fluctuations in Japanese and U.S. labor markets. Despite the differences in the structures of the two labor markets, the authors find that unemployment and vacancies respond similarly to aggregate shocks. However, different shocks appear to be important in explaining fluctuations in the two labor markets.