Job-to-Job Transitions, Labor Force Participation, and the Output Gap
Sunday, Jan. 6, 2019 10:15 AM - 12:15 PM
- Chair: Emi Nakamura, University of California-Berkeley
Flow Origins of Labor Force Participation Fluctuations
AbstractWe investigate the flow origins of business cycle and trend movements in the labor force participation rate. A three-state decomposition based on monthly labor market flows reveals a new stylized fact: increased attachment to the labor force, rather than increased labor force entry, accounts for majority of business cycle and trend movements in the participation rate. A prominent example is the considerable rise in the female participation rate, which can be attributed to a gradual rise in the persistence of participation for women. We also show that recent improvements in the labor force participation rate can be traced to a rise in the persistence of participation rather than increased entry to the labor force.
Is Inflation Just Around the Corner? The Phillips Curve and Global Inflationary Pressures
AbstractSince the end of the Great Recession and the Global Financial Crisis, inflation has been stubbornly low in advanced economies. Even with record low unemployment rates in the U.S. and other countries, inflation does not appear to be rising. We provide new evidence on the strength of the Phillips curve relationship, using survey measures of firm and household inflation expectations for a range of countries. We find a robust negative relationship between unemployment gaps and inflation, once one conditions on inflation expectations. Current deviations of inflation from inflation expectations suggest that there remains significant economic slack, both in the U.S. and in many other advanced economies.
- E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
- E3 - Prices, Business Fluctuations, and Cycles