Dynamism Diminished: The Role of Housing Markets and Credit Conditions

By Steven J. Davis and John Haltiwanger

American Economic Journal: Macroeconomics, April 2024

We estimate the effects of house price changes on young-firm employment shares and industry-level employment growth in local economies. A novel test shows that house price effects on local economies work through wealth, liquidity, and collateral effects o...

A Framework for Economic Growth with Capital-Embodied Technical Change

By Benjamin F. Jones and Xiaojie Liu

American Economic Review, May 2024

Technological advance is often embodied in capital inputs, like computers, airplanes, and robots. This paper builds a framework where capital inputs advance through (i) increased automation and (ii) increased productivity. The interplay of these two innov...

The Shifting Reasons for Beveridge Curve Shifts

[Symposium: Labor Market and Macroeconomics]

By Gadi Barlevy, R. Jason Faberman, Bart Hobijn, and Ayşegül Şahin

Journal of Economic Perspectives, Spring 2024

We discuss how the relative importance of factors that contribute to movements of the US Beveridge curve has changed from 1959 to 2023. We review these factors in the context of a simple flow analogy used to capture the main insights of search and match...

Why Labor Supply Matters for Macroeconomics

[Symposium: Labor Market and Macroeconomics]

By Richard Rogerson

Journal of Economic Perspectives, Spring 2024

Benchmark models taught in undergraduate macro do not attribute any role for labor supply as an important determinant of macroeconomic outcomes. The first part of this paper documents three facts. First, differences in hours of work across OECD economie...

How Cyclical Is the User Cost of Labor?

[Symposium: Labor Market and Macroeconomics]

By Marianna Kudlyak

Journal of Economic Perspectives, Spring 2024

In employment relationships, a wage is an installment payment on an implicit long-term agreement between a worker and a firm. The price of labor that impacts firm's hiring decisions, instead, reflects the hiring wage as well as the impact of economic cond...

The Slanted-L Phillips Curve

By Pierpaolo Benigno and Gauti B. Eggertsson

AEA Papers and Proceedings, May 2024

A slanted-L curve is well suited to represent the nonlinearity of the celebrated Phillips curve. We show this using cross-country data of major industrialized economies since 2009, including the inflationary surge of the 2020s. At high unemployment rates,...

What Explains Black Employment Dynamics?

By Karl David Boulware and Kenneth N. Kuttner

AEA Papers and Proceedings, May 2024

This paper investigates the proximate causes of excessively cyclical employment growth and persistently high unemployment among Black workers, relative to White workers. Using data from the Quarterly Workforce Indicators and Job-to-Job Flows, we find that...

Status Externalities in Education and Low Birth Rates in Korea

By Seongeun Kim, Michèle Tertilt, and Minchul Yum

American Economic Review, June 2024

South Koreans appear to be preoccupied with their offspring's education and also have the lowest total fertility rate in the world. We propose a novel theory with status externalities and endogenous fertility connecting these facts, motivated by novel emp...

Financial Access and Labor Market Outcomes: Evidence from Credit Lotteries

By Bernardus Van Doornik, Armando Gomes, David Schoenherr, and Janis Skrastins

American Economic Review, June 2024

We assess the employment and income effects of access to credit dedicated to investment in individual mobility by exploiting time-series variation in access to credit through lotteries for participants in a group-lending mechanism in Brazil. We find that ...

Data and the Aggregate Economy

By Laura Veldkamp and Cindy Chung

Journal of Economic Literature, June 2024

Recent data technology innovations, such as artificial intelligence and machine learning, have transformed the production of knowledge and increased the importance of data. This review explores how data—digitized information—has been modeled within cl...

Demographic Origins of the Start-up Deficit

By Fatih Karahan, Benjamin Pugsley, and Ayşegül Şahin

American Economic Review, July 2024

We propose a simple explanation for the long-run decline in the US start-up rate. It originates from a slowdown in labor supply growth since the late 1970s, largely predetermined by demographics. This channel can explain roughly half of the decline and wh...

100 Years of Rising Corporate Concentration

By Spencer Y. Kwon, Yueran Ma, and Kaspar Zimmermann

American Economic Review, July 2024

We collect data on the size distribution of US businesses for 100 years, and use these data to estimate the concentration of production (e.g., asset share or sales share of top businesses). The data show that concentration has increased persistently over ...

Measuring Employer-to-Employer Reallocation

By Shigeru Fujita, Giuseppe Moscarini, and Fabien Postel-Vinay

American Economic Journal: Macroeconomics, July 2024

We revisit measurement of employer-to-employer (EE) transitions in the monthly Current Population Survey. The incidence of missing answers to the question on change of employer sharply increases starting with the introduction of a new software instrument ...

Asymmetric Reciprocity and the Cyclical Behavior of Wages, Effort, and Job Creation

By Marco Fongoni

American Economic Journal: Macroeconomics, July 2024

This paper develops a search and matching framework in which workers are characterized by asymmetric reference-dependent reciprocity and firms set wages by considering the effect that these can have on workers' effort and, therefore, on output. The cyclic...

Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment

By Youngsoo Jang and Minchul Yum

American Economic Journal: Macroeconomics, July 2024

This paper quantitatively investigates the medium- and long-term macroeconomic and distributional consequences of school closures through intergenerational channels. The model economy is a dynastic overlapping-generations general equilibrium model in whic...

Macroeconomic Frameworks: Reconciling Evidence and Model Predictions from Demand Shocks

By Alan J. Auerbach, Yuriy Gorodnichenko, and Daniel Murphy

American Economic Journal: Macroeconomics, July 2024

How do demand shocks affect the economy? We exploit detailed data on US defense spending to examine a large set of outcome variables in response to well-identified local demand shocks, jointly examining new outcomes (e.g., firm entry and housing rents) an...

Microeconomic Principles Teaching Tricks

By Daniel S. Hamermesh

American Economic Review, May 2002

Reconsidering Crucial Concepts in Micro Principles

By Karl E. Case

American Economic Review, May 2002

Spending and Job-Finding Impacts of Expanded Unemployment Benefits: Evidence from Administrative Micro Data

By Peter Ganong, Fiona Greig, Pascal Noel, Daniel M. Sullivan, and Joseph Vavra

American Economic Review, September 2024

We show that the largest increase in unemployment benefits in US history had large spending impacts and small job-finding impacts. This finding has three implications. First, increased benefits were important for explaining aggregate spending dynamics—b...

Labor Substitutability among Schooling Groups

By Mark Bils, Bariş Kaymak, and Kai-Jie Wu

American Economic Journal: Macroeconomics, October 2024

Given worldwide trends in education, wage premium for schooling, and real GDP, we derive a lower bound for the long-run elasticity of labor substitution across schooling groups of around 4, which is far higher than values commonly used in the literature. ...