Macroeconomic Consequences of Population Aging in the United States: Overview of a National Academy Report

By Ronald D. Lee

American Economic Review, May 2014

The US population will age rapidly for several decades and then more slowly, with less aging than most rich nations. Health of the elderly has greatly improved, but disability stagnated after 2000. Retirement age reversed its decline in the mid-1990s and ...

Mismatch Unemployment

By Ayşegül Şahin, Joseph Song, Giorgio Topa, and Giovanni L. Violante

American Economic Review, November 2014

We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S....

Structural Transformation, the Mismeasurement of Productivity Growth, and the Cost Disease of Services

By Alwyn Young

American Economic Review, November 2014

If workers self-select into industries based upon their relative productivity in different tasks, and comparative advantage is aligned with absolute advantage, then the average efficacy of a sector's workforce will be negatively correlated with its emp...

The Human Capital Stock: A Generalized Approach

By Benjamin F. Jones

American Economic Review, November 2014

This paper reconsiders the traditional approach to human capital measurement in the study of cross-country income differences. Within a broader class of neoclassical human capital aggregators, traditional accounting is found to be a theoretical lower boun...

Consume Now or Later? Time Inconsistency, Collective Choice, and Revealed Preference

By Abi Adams, Laurens Cherchye, Bram De Rock, and Ewout Verriest

American Economic Review, December 2014

We develop a revealed preference methodology that allows us to explore whether time inconsistencies in household choice are the product of individual preference nonstationarities or the result of individual heterogeneity and renegotiation within the ho...

Understanding the Great Recession

By Lawrence J. Christiano, Martin S. Eichenbaum, and Mathias Trabandt

American Economic Journal: Macroeconomics, January 2015

We argue that the vast bulk of movements in aggregate real economic activity during the Great Recession were due to financial frictions. We reach this conclusion by looking through the lens of an estimated New Keynesian model in which firms face moderate ...

Is the Phillips Curve Alive and Well after All? Inflation Expectations and the Missing Disinflation

By Olivier Coibion and Yuriy Gorodnichenko

American Economic Journal: Macroeconomics, January 2015

We evaluate explanations for the absence of disinflation during the Great Recession and find popular explanations to be insufficient. We propose a new explanation for this puzzle within the context of a standard Phillips curve. If firms' inflation expecta...

The Possible Unemployment Cost of Average Inflation below a Credible Target

By Lars E. O. Svensson

American Economic Journal: Macroeconomics, January 2015

If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the target, the long-run Phillips curve becomes nonvertical. During 1997-2011, average inflation expectations in Sweden have been close to t...

The Price of Experience

By Hyeok Jeong, Yong Kim, and Iourii Manovskii

American Economic Review, February 2015

We identify a key role of factor supply, driven by demographic changes, in shaping several empirical regularities that are a focus of active research in macro and labor economics. In particular, demographic changes alone can account for the large movement...

Optimal Life Cycle Unemployment Insurance

By Claudio Michelacci and Hernán Ruffo

American Economic Review, February 2015

We argue that US welfare would rise if unemployment insurance were increased for younger and decreased for older workers. This is because the young tend to lack the means to smooth consumption during unemployment and want jobs to accumulate high-return...

Optimal Labor-Market Policy in Recessions

By Philip Jung and Keith Kuester

American Economic Journal: Macroeconomics, April 2015

Within a search and matching model with risk-averse workers, endogenous hiring and separation, and unobservable search effort, we show how to decentralize the constrained-efficient allocation by a combination of a production tax and three labor-market pol...

Secular Stagnation: A Supply-Side View

By Robert J. Gordon

American Economic Review, May 2015

Secular stagnation on the supply side takes the form of a slow 1.6 percent annual growth rate of US potential real GDP, roughly half the 3.1 percent annual growth rate of actual real GDP realized from 1972 to 2004. This slowdown stems from a sharp decline...

Demand Side Secular Stagnation

By Lawrence H. Summers

American Economic Review, May 2015

The experience of first Japan and now Europe and the USA suggests that Hansen's concept of secular stagnation is highly relevant. Recovery has been anemic and follows a generation of financially unsustainable and often lackluster growth. Investment demand...

Secular Stagnation: The Long View

By Barry Eichengreen

American Economic Review, May 2015

Four explanations for secular stagnation are distinguished: a rise in global saving, slow population growth that makes investment less attractive, adverse trends in technology and productivity growth, and a decline in the relative price of investment good...

Human Capital and Growth

By Robert E. Lucas Jr.

American Economic Review, May 2015

This paper describes a growth model with the property that human capital accumulation can account for all observed growth. The model is shown to be consistent with evidence on individual productivities as measured by census earnings data. The central hypo...

Living Arrangements, Doubling Up, and the Great Recession: Was This Time Different?

By Marianne Bitler and Hilary Hoynes

American Economic Review, May 2015

The Great Recession marks the worst downturn since those of the early 1980s. A large literature considers how the public safety net responded to this shock. We instead consider the responsiveness of one dimension of the private safety net. Families can re...

The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out

By Henry S. Farber, Jesse Rothstein, and Robert G. Valletta

American Economic Review, May 2015

Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the ...

Disability Insurance and the Great Recession

By Nicole Maestas, Kathleen J. Mullen, and Alexander Strand

American Economic Review, May 2015

The US Social Security Disability Insurance (SSDI) program is designed to provide income support to workers who become unable to work because of a severe, long-lasting disability. In this study, we use administrative data to estimate the effect of labor m...

Endogenous Liquidity and the Business Cycle

By Saki Bigio

American Economic Review, June 2015

I study an economy where asymmetric information about the quality of capital endogenously determines liquidity. Liquid funds are key to relaxing financial constraints on investment and employment. These funds are obtained by selling capital or using it as...

Why Are There Still So Many Jobs? The History and Future of Workplace Automation

[Symposium: Automation and Labor Markets]

By David H. Autor

Journal of Economic Perspectives, Summer 2015

In this essay, I begin by identifying the reasons that automation has not wiped out a majority of jobs over the decades and centuries. Automation does indeed substitute for labor—as it is typically intended to do. However, automation also comple...