The Unassuming Economist

Showing posts with label Inclusive Growth.   Show all posts

Tuesday, February 24, 2015

Uncertainty and U.S. Unemployment

My new paper with Sam Choi updates (through 2014:Q3) estimates of how much uncertainty has contributed to U.S. unemployment (particularly long-term unemployment) during the Great Recession. Our measures of aggregate and sectoral uncertainty are both back to pre-crisis levels. Consequently, the contribution to uncertainty to long-term unemployment has diminished considerably since 2010.

Our aggregate uncertainty measure is the realized volatility of S&P 500 index returns, similar to Bloom (2009). We find that aggregate uncertainty contributed to long-term unemployment in 2009 and again in 2012. Our sectoral uncertainty measure is the cross-section dispersion in industry excess returns. We show in the paper that this measure of uncertainty tends to have more persistent impacts on unemployment than aggregate uncertainty. The contribution of sectoral uncertainty to U.S. long-term unemployment peaked in mid-2010 and has declined steadily ever since. The main reason for the decline in long-term unemployment form 4 percent in mid-2010 to 2 percent in 2014 is the resumption of growth (the contribution of growth is shown as part of the other factors in the chart above).

My new paper with Sam Choi updates (through 2014:Q3) estimates of how much uncertainty has contributed to U.S. unemployment (particularly long-term unemployment) during the Great Recession. Our measures of aggregate and sectoral uncertainty are both back to pre-crisis levels. Consequently, the contribution to uncertainty to long-term unemployment has diminished considerably since 2010.

Our aggregate uncertainty measure is the realized volatility of S&P 500 index returns, Read the full article…

Posted by Prakash Loungani at 12:34 PM

Labels: Inclusive Growth

Friday, February 20, 2015

New Results on Capital Account Liberalization and Inequality

My talk at the New School today included an update of results on the impact of capital account liberalization on inequality (with Davide Furceri and Florence Jaumotte). In past work, we had shown that liberalization leads to an increase in inequality in advanced economies — see this F&D article and VoxEU blog and the discussion of these results by Paul Krugman. The results for a broader group of countries are given in this paper; a Cliff’s Notes version of the paper is given here, with an associated PPT.

My talk at the New School today included an update of results on the impact of capital account liberalization on inequality (with Davide Furceri and Florence Jaumotte). In past work, we had shown that liberalization leads to an increase in inequality in advanced economies — see this F&D article and VoxEU blog and the discussion of these results by Paul Krugman. The results for a broader group of countries are given in this paper; Read the full article…

Posted by Prakash Loungani at 5:29 PM

Labels: Inclusive Growth

Thursday, February 12, 2015

Oil Prices and Employment: Some Evidence from US States

A new IMF working paper finds that an addition of an oil rig “results in the creation of 37 jobs immediately and 224 jobs in the long run, though our robustness checks suggest that these multipliers could be bigger.” 

A new IMF working paper finds that an addition of an oil rig “results in the creation of 37 jobs immediately and 224 jobs in the long run, though our robustness checks suggest that these multipliers could be bigger.” 

Read the full article…

Posted by Prakash Loungani at 2:35 PM

Labels: Inclusive Growth

Wednesday, February 11, 2015

Is Manufacturing Still a Key to Growth?

In a new OCP Policy Center paper, Uri Dadush of Carnegie and OCP writes: “The paper has shown that, over the last thirty years, many economies have been able to double their per capita income and achieve large improvement in other development indicators without relying principally on manufacturing. The main policy implication is not that the manufacturing sector should be shunned or ignored, but that the view that a large manufacturing sector oriented towards world markets is essential to a rapid advance in living standards is mistaken. Instead, policy needs to recognize that, in a globalized economy, all sectors can improve by learning from those at the technology frontier, that many possible sources of comparative advantage exist, and that careful macroeconomic management and flexible exchange rates are a preferable way to maintain external balance than interventions in specific sectors.”

In a new OCP Policy Center paper, Uri Dadush of Carnegie and OCP writes: “The paper has shown that, over the last thirty years, many economies have been able to double their per capita income and achieve large improvement in other development indicators without relying principally on manufacturing. The main policy implication is not that the manufacturing sector should be shunned or ignored, but that the view that a large manufacturing sector oriented towards world markets is essential to a rapid advance in living standards is mistaken. Read the full article…

Posted by Prakash Loungani at 12:41 PM

Labels: Inclusive Growth

Friday, February 6, 2015

International Jobs Report: It’s Not Just About US

The U.S jobs report to be released today is expected to show strong job creation. How do things look outside the U.S.? The new International Jobs Report shows that the global unemployment rate has returned to its pre-crisis level. But emerging economies are doing better than advanced economies; and within advanced economies, the U.S is doing better than the rest.

The U.S jobs report to be released today is expected to show strong job creation. How do things look outside the U.S.? The new International Jobs Report shows that the global unemployment rate has returned to its pre-crisis level. But emerging economies are doing better than advanced economies; and within advanced economies, the U.S is doing better than the rest.

Read the full article…

Posted by Prakash Loungani at 11:40 AM

Labels: Inclusive Growth

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