Reports

“In the US, workers must satisfy two requirements to receive unemployment insurance (UI): a tenure requirement of a minimum work spell and a monetary requirement of past minimum earnings. Using discontinuity of UI rules at state borders, we find that the monetary requirement decreases the number of employers and the share of part-time workers, while…

“In this Chicago Fed Letter, we use a quantitative macroeconomic model to tackle the question of whether the response of the Federal Reserve (the Fed) to recent high inflation is consistent with its historical behavior. This is an important question because systematic deviations from past behavior could lead the private sector to revise its expectations…

“Many central banks and government agencies use nowcasting techniques to obtain policy relevant information about the business cycle. Existing nowcasting methods, however, have two critical shortcomings for this purpose. First, in contrast to machine-learning models, they do not provide much if any guidance on selecting the best explantory variables (both high- and low-frequency indicators) from…

“We introduce a survey instrument that measures earnings risk. A key feature of our instrument is that it conditions on possible job transitions, i.e., whether people stay in their current job, quit or are laid off. A link with administrative data provides many credibility checks. It also reveals subjective earnings risk to be significantly lower…

“Do periods of persistently loose monetary policy increase financial fragility and the likelihood of a financial crisis? This is a central question for policymakers, yet the literature does not provide systematic empirical evidence about this link at the aggregate level. In this paper we fill this gap by analyzing long-run historical data. We find that…

“Across advanced economies, growth in labor productivity and total factor productivity is notably lower than it was 20 to 30 years ago. We compare the two primary narratives for this slowdown. The first emphasizes the common shock of the Great Recession. The second emphasizes a common trend slowdown. The two explanations are not mutually exclusive;…

“Key data in January suggest that the economy began 2023 on solid footing, although there are some inklings that the pace of retail sales could be slower in February. Continued high inflation rates and a rebound in market-based measures of inflation expectations indicate that downside risks to the economy remain elevated. For these reasons, uncertainty…

“A defining feature of the US economy since 2021 has been the unusual tightness of the labor market. The unemployment rate, currently 3.5 percent, not long ago reached historic lows, while currently about 7 percent of available jobs are unfilled, a historically high level. Labor markets can tighten if labor demand increases or labor supply…

“So, what does a ‘typical’ recession look like? Recessions usually include the following characteristics:” “A. A negative shock such as a financial crisis occurs.” “B. Firms reduce investment spending on machinery, equipment, new factories, and new office buildings (physical capital). In fact, typical recessions begin with reduced business investment spending, which is the most volatile…