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Working Paper
UI Generosity and Job Acceptance: Effects of the 2020 CARES Act
To provide economic relief following the onset of the COVID-19 pandemic, the U.S. CARES Act granted an extra $600 per week in unemployment insurance (UI) benefit payments from late March through July 2020. This unprecedented increase in UI generosity caused weekly benefit payments to exceed prior earnings for most recipients, raising concern that many would be unwilling to accept job offers, slowing the labor market recovery. To assess the impact of the UI supplement, we analyze the job acceptance decision in a dynamic framework in which job seekers weigh the value of a job against remaining ...
Discussion Paper
State Budget Surpluses, the COVID-19 Impact, and ARPA Funds
Speech
Implementing the Fed’s Facilities: Moving at Maximum Speed with Maximum Care
Remarks before the Money Marketeers of New York University (delivered via audio webinar).
Journal Article
Who Benefited Most from the CARES Act Unemployment Insurance Provisions?
The regular unemployment insurance (UI) program in the United States requires workers to have a minimum amount of earnings as well as a sufficient work history before unemployment. Low-wage workers are more likely to have a short work history before unemployment because they are more likely to be separated from their jobs. Pandemic Unemployment Assistance (PUA) under the CARES Act temporarily eliminated the requirements for minimum past earnings and length of employment, thus making many low-wage workers who were ineligible for UI under the regular program temporarily eligible. The extra ...
Working Paper
Fiscal Policy during a Pandemic
I study the effects of the 2020 coronavirus outbreak in the United States and subsequent fiscal policy response in a nonlinear DSGE model. The pandemic is a shock to the utility of contact-intensive services that propagates to other sectors via general equilibrium, triggering a deep recession. I use a calibrated version of the model that matches the path of the US unemployment rate in 2020 to analyze different types of fiscal policies. I find that UI benefits are the most effective tool to stabilize income for borrowers, who are the hardest hit, while liquidity assistance programs are ...
Working Paper
Unemployment Insurance during a Pandemic
The CARES Act implemented in response to the COVID-19 crisis dramatically increases the generosity of unemployment insurance (UI) benefits, triggering concerns about its substantial impact on unemployment. This paper combines a labor market search-matching model with the SIR-type infection dynamics to study the effects of CARES UI on both unemployment and infection. More generous UI policies create work disincentives and lead to higher unemployment, but they also reduce infection and save lives. Shutdown policies and infection risk further amplify these effects of UI policies. Quantitatively, ...
Working Paper
Fiscal Policy during a Pandemic
I study the effects of the 2020 coronavirus outbreak in the United States and subsequent fiscal policy response in a nonlinear DSGE model. The pandemic is a shock to the utility of contact-intensive services that propagates to other sectors via general equilibrium, triggering a deep recession. I use a calibrated version of the model that matches the path of the US unemployment rate in 2020 to analyze different types of fiscal policies. I find that the pandemic shock changes the ranking of policy multipliers. Unemployment benefits are the most effective tool to stabilize income for borrowers, ...
Report
COVID Response: The Paycheck Protection Program Liquidity Facility
To bolster the effectiveness of the Small Business Administration’s Paycheck Protection Program (PPP), the Federal Reserve, with the backing of the Secretary of the Treasury, established the Paycheck Protection Program Liquidity Facility (PPPLF). The facility was intended to supply liquidity to financial institutions participating in the PPP and thereby provide relief to small businesses and help them maintain payroll. In this article, we lay out the background and rationale for the creation of the facility, cover the salient features of the PPP and the PPPLF, and analyze the facility’s ...
Speech
Panel Remarks: Supervisory and Regulatory Action to Support the Economy and Protect Consumers
Panel Remarks at The Fed and Main Street during the Coronavirus Pandemic, WebEx event, April 23, 2020.
Working Paper
Unemployment Insurance during a Pandemic
The CARES Act implemented in response to the COVID-19 crisis dramatically increases the generosity of unemployment insurance (UI) benefits, triggering concerns about its substantial impact on unemployment. This paper combines a labor market search-matching model with the SIR-type infection dynamics to study the effects of CARES UI on both unemployment and infection. More generous UI policies create work disincentives and lead to higher unemployment, but they also reduce infection and save lives. Economic shutdown policies further amplify these effects of UI policies. Quantitatively, the CARES ...