Search Results
Journal Article
Job creation and destruction
Journal Article
Recent research on sticky prices
This Economic Letter summarizes the papers presented at the conference "Nominal Rigidities" held in San Francisco on June 16 under the joint sponsorship of the Federal Reserve Bank of San Francisco, the National Bureau of Economic Research, and the Federal Reserve Bank of Cleveland.
Journal Article
Modeling the time-series behavior of the aggregate wage rate
This paper looks at the time-series behavior of the real wage relative to that of productivity. Given an exogenous, nonstationary process for productivity, we use a simple model of dynamic labor demand to show that the real wage and the marginal product of labor will be cointegrated if the representative firm chooses the profit-maximizing level of employment. Data for the postwar period satisfy this condition. On the basis of this result we estimate a vector error correction model containing prices, wages, and productivity and examine the dynamic relationships among these variables. This ...
Journal Article
Productivity shocks and the unemployment rate
Productivity grew noticeably faster than usual in the late 1990s, while the unemployment rate fell to levels not seen for more than three decades. This inverse relationship between the two variables also can be seen on several other occasions in the postwar period and leads one to wonder whether there is a causal link between them. This paper focuses on technological change as the common factor, first reviewing some recent research on the effect of technological change on the unemployment rate and then presenting some empirical evidence on the issue. While theoretical models make conflicting ...
Journal Article
Talking about tomorrow’s monetary policy today
As part of their efforts to promote economic recovery, some central banks have announced they will not raise policy rates for specified time periods. Other central banks have not been as explicit, though they have provided guidance. A comparison of the effects of the Bank of Canada's conditional promise to hold rates steady through the second quarter of 2010 with the Federal Reserve's less explicit guidance finds no evidence that market participants make distinctions between these statements.
Working Paper
Money, income, prices and interest rates: a comment
Journal Article
Cities and growth
Working Paper
Accounting for the secular “decline” of U.S. manufacturing
The share of employment in manufacturing as well as the relative price of manufactures has declined sharply over the postwar period, while the share of manufacturing output relative to GDP has remained roughly constant. Household preferences turn out to play a key role in reconciling this behavior with a closed-economy, two-sector model with differential rates of productivity growth. We show that the data imply that households are not willing to substitute between the two goods at all and also that this inference is independent of whatever the income elasticity of demand for services might ...