Vania Esady, Bradley Speigner and Boromeus Wanengkirtyo The headline unemployment rate is one of the most widely used indicators of economic slack to measure the state of the business cycle. A large empirical literature on Phillips curve estimation has explored whether more general definitions of labour utilisation are more informative than this simple measure. In … Continue reading Does long-term unemployment affect inflation dynamics?
Macroeconomics
Sangyup Choi, Tim Willems and Seung Yong Yoo How does monetary policy really affect the real economy? What kinds of firms or industries are more sensitive to changes in the stance of monetary policy, and through which exact channels? Despite advances in our understanding of the monetary transmission mechanism, existing studies have not reached a … Continue reading What can we learn about monetary policy transmission using international industry-panel data?
Ambrogio Cesa-Bianchi, Federico Di Pace, Aydan Dogan and Alex Haberis The recent steep rise in energy prices led to a rise in the price of energy-intensive tradable goods, with inflationary pressures subsequently broadening into services in many economies. Because services are less traded and have little energy input some have suggested this broadening might indicate … Continue reading Tradable cost shocks and non-tradable inflation: real wages and spillovers
Natalie Burr The challenge of measuring financial conditions Imagine you were tasked with thinking about how financial conditions have changed over a policy tightening cycle. Different economists would come to very different conclusions, and none would necessarily be wrong. Why? Because measuring financial conditions is challenging – for a variety of reasons. A financial conditions … Continue reading The challenges of measuring financial conditions
Jelle Barkema How concerned should policymakers be as UK business insolvencies have soared to 60-year highs? This phenomenon has been extensively covered in the media; with media outlets attributing the record-breaking numbers to a ‘perfect storm’ of energy prices, supply-chain disruptions and the cost of living squeeze. Insolvencies are a popular measure of economic distress … Continue reading Corporate insolvencies reaching record highs: a look under the hood
A comment on Bernanke’s Nobel lecture James K. Galbraith There is no doubt that Ben Bernanke is a nice fellow, unpretentious despite having held high…
The post A comment on Bernanke’s Nobel lecture first appeared on Economic Reform Australia.The debt ceiling limit is destructive, duplicative and dumb Stephanie Kelton In a previous issue of ERA Review we drew attention to the regular saga…
The post The debt ceiling limit is destructive, duplicative and dumb first appeared on Economic Reform Australia.Monetary and fiscal policy frameworks for Australia part 2 John Haly This is a continuation of my October 2022 submissions in accordance with the review…
The post Monetary and fiscal policy frameworks for Australia part 2 first appeared on Economic Reform Australia.Vania Esady In macroeconomic models, economic agents are often assumed to perfectly observe the current state, but in reality they have to infer current conditions (nowcast). Because of information costs, this is not always easy. Information costs are not observable in the data but they can be proxied. A good proxy is disagreement on a … Continue reading Time-varying disagreement and monetary transmission
Why the conventional tools of the Phillips Curve, NAIRU, potential output, and money-supply growth are useless
const trinityScript = document.createElement('script'); trinityScript.setAttribute('fetchpriority', 'high'); trinityScript.src = 'https://trinitymedia.ai/player/trinity/2900011009/?pageURL=' + encodeURIComponent(window.location.href); document.currentScript.parentNode.insertBefore(trinityScript, document.currentScript);1. Introduction
The word “unemployment” has a precise technical meaning, with origins in the industrial economy of post-Civil War Massachusetts (Card 2011); to be unemployed is to be seeking paid work but unable to find it at the prevailing wage. The concept was developed for administrative purposes at particular stages of capitalist development; it has legal and social-welfare implications, and the word is not applicable in other settings, such as peasant-agrarian or informal economies.