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Journal Article
Government Spending Might Not Create Jobs Even during Recessions
A review of government spending over 120 years seems to show little, if any, impact on job creation. The result is the same whether the economy is in a recession or not.
Journal Article
Auto Sales and the 2007-09 Recession
The auto sector continues to play an important role in understanding recessions.
Journal Article
Increasing Employment by Halting Pandemic Unemployment Benefits
In mid-2021, 26 states halted participation in all or some federal emergency unemployment benefits (EUB) programs before those programs' federal funding lapsed. This article uses this asynchronous EUB cessation between early- and late-halting states to estimate the causal impact of benefit cessation on employment. We find that cessation increased employment by 29 persons for every 100 (pre-halt) EUB recipients. Expressed as a number of jobs, if all states had halted EUB in June, September employment would have been 3.4 million persons higher relative to a no-halt counterfactual. Late-halting ...
How Uneven Were the Labor Market Recoveries across U.S. States?
Some states finished 2021 with unemployment rates below their pre-pandemic levels, while most had rates still above levels before COVID-19.
Working Paper
The Expected Inflation Channel of Government Spending in the Postwar U.S.
There exist sticky price models in which the output response to a government spending change can be large if the central bank is nonresponsive to inflation. According to this "expected inflation channel," government spending drives up expected inflation, which in turn, reduces the real interest rate and leads to an increase in private consumption. This paper examines whether the channel was important in the post-WWII U.S., with particular attention to the 2009 Recovery Act period. First, we show that a model calibrated to have a large output multiplier requires a large response of expected ...
Journal Article
Stimulus Grants and Schools: How Was the Money Spent?
The American Recovery and Reinvestment Act of 2009 provided $64 billion in stimulus funds to public school districts. A little over half of the money went toward expenditures, and most of that was used for capital outlays. The impact on employment was negligible.
Working Paper
The analytics of technology news shocks
This paper constructs several models in which, unlike the standard neoclassical growth model, positive news about future technology generates an increase in current consumption, hours and investment. These models are said to exhibit procyclical news shocks. We find that all models that exhibit procyclical news shocks in our paper have two commonalities. There are mechanisms to ensure that: (I) consumption does not crowd out investment, or vice versa; (II) the benefit of forgoing leisure in response to news shocks outweighs the cost. Among the models we consider, we believe, one model holds ...
Journal Article
The Efficacy of Enhanced Unemployment Benefits during a Pandemic
To help laid-off and furloughed workers, providing enhanced unemployment insurance benefits may be quicker and more efficient than using small business payroll loans.
Journal Article
Liftoff and the Natural Rate of Interest
The natural rate is viewed in some circles as a useful concept for the FOMC in setting the federal funds rate.
Journal Article
Stimulus Spending Had Spillover Effects, Thanks to Commuters
The federal stimulus spending in one county increased employment and wage payments two to three counties away, the authors found in a study of the American Recovery and Reinvestment Act of 2009. The spending spilled over as long as the geographic areas were sufficiently connected, as measured by commuting patterns.