James Bullard, 16 May 2020

In the US around 1,600 firms go out of business in a normal day. James Bullard, Federal Reserve Bank of St. Louis, thinks there is little chance of businesses that were about to go under before the pandemic being shored up by the measures being taken to protect the US economy. His view is that whatever economy we had on February 1st, we want that economy on the other side of the pandemic

James Bullard, 16 April 2020

The actions and policies taken to control the spread of COVID-19 in the US have had the effect of engineering a controlled, partial and temporary shutdown of certain sectors of the economy. James Bullard, Federal Reserve Bank of St. Louis, tells Tim Phillips about the implications of theses radical changes to the management of the US economy in the near term.

Olivier Coibion, Yuriy Gorodnichenko, Michael Weber, 14 April 2020

The Covid-19 crisis in the US and the policy responses have led to unprecedented numbers of initial claims for unemployment, but there are concerns that total job losses are being understated. This column uses a repeated large-scale survey of households in the Nielsen Homescan panel to show that job loss has been significantly greater than implied by new unemployment claims, with an estimated 20 million jobs lost by 8 April – far more than were lost over the entire Great Recession. Many of those who have lost their jobs are not actively looking to find new ones.

Pascal Michaillat, Emmanuel Saez, 12 April 2020

A lower unemployment rate puts more people into work, but it also makes it harder for businesses to fill their vacancies. This column explores the trade-off between unemployment and vacancies, as captured by the Beveridge curve – a measure which can then be used to estimate the socially efficient unemployment rate for the wider economy. The analysis suggests that the US unemployment rate of 3.5% just before the coronavirus crisis was just about efficient. 

B. Ravikumar, Guillaume Vandenbroucke, 17 April 2020

This column uses the actual number of COVID-19-related deaths to calculate projections for the US based on other countries’ experiences.

Hamish Low, Luigi Pistaferri, 08 April 2020

Disability insurance programmes provide income replacement and medical benefits to workers who face major health shocks impeding their ability to work. The screening error of incorrect acceptance – where individuals who are not disabled are awarded benefits – and moral hazard have been well researched, but scant attention has been paid to incorrect rejection. Using US data, this column shows that the probability of being rejected when disabled varies with a host of observable characteristics. Most strikingly, truly disabled women are 20 percentage points more likely to be incorrectly rejected than observationally equivalent men.

James Bullard, 04 April 2020

The actions and policies taken to control the spread of COVID-19 in the US have had the effect of engineering a controlled, partial and temporary shutdown of certain sectors of the economy. This column argues that this organised ‘throttling down’ radically changes the way we need to think about and gauge the health of the US economy in the near term. The goals of macroeconomic policy will need to be very different, in some ways the opposite of what we would normally try to accomplish.

Marijn Bolhuis, Judd N. L. Cramer, 02 April 2020

The effects of the COVID-19 pandemic on public health will have major repercussions for the global economy, impacting trends in many different sectors. This column uses detailed neighbourhood-level data to evaluate the impact of demographic changes on different segments of the US housing market. As larger homes (and those in neighbourhoods with relatively more baby boomers) lag behind the broader market in terms of price growth, they also appear increasingly difficult to sell. In the wake of COVID-19, a large share of the US population is at risk of taking a substantial hit to their asset portfolio, just as they retire.

Giulia Giupponi, Camille Landais, 01 April 2020

Short-time work is a subsidy for temporary reductions in the number of hours worked in firms affected by temporary shocks. Evidence suggests that it can have large positive effects on employment and can be more effective than unemployment insurance or universal transfers. This column discusses how the COVID-19 crisis – with its mandated reduction in hours of work and massive liquidity crunch for firms – is a textbook case for the use of short-time work. Taking into account available evidence and the current situation, it proposes guidelines to effectively implement short-term work.

Mikkel Hermansen, 15 March 2020

More than a fifth of American workers are required to hold an occupational licence to do their job, usually with the aim of protecting public health and safety. However, secular declines in job mobility, business dynamics, and productivity growth have raised concerns over the costs of licensing and its potential influence on these trends. Using novel administrative data with nearly complete employment coverage, this column presents suggestive evidence of sizeable effects of licensing on job mobility, especially on job-to-job flows across states. 

Francine Blau, Lawrence Kahn, Peter Brummund, Jason Cook, Miriam Larson-Koester, 12 March 2020

Previous studies provided evidence that even in developed countries, parents behaved differently with sons than with daughters. In light of more recent data, this column presents new evidence that the preference for sons appears to have declined in the US. Having a female first child continues to increase the likelihood of a family’s living without a father, but is now associated with lower fertility over time. 

Wolfgang Keller, Hâle Utar, 05 March 2020

The 20th century saw a steady increase in the number of women postponing motherhood to enhance their labour market opportunities. Sometime in the early 2000s, that trend ended. This column compares the experience of women in the US and Denmark and finds that women of childbearing age who experienced diminished labour market opportunities because of import competition from China turned towards family life, while men focused on finding a new career path in the labour market. Import competition from China raised the likelihood of marriage for women but not for men.

Leah Boustan, 02 March 2020

Are the children of immgrants to the US who are being raised below the middle class able to move up?

Christian Bayer, Benjamin Born, Ralph Luetticke, 26 February 2020

How much does inequality matter for the business cycle and vice versa? This column explores the two-way relationship using a heterogeneous agent New Keynesian model estimated on both the macro and micro data. Although adding data on wealth and income inequality may not materially change the estimated shocks driving the US business cycle, the estimated business cycle shocks themselves are useful for explaining the evolution of US wealth and income inequality from the 1950s to today.

Leah Boustan, 21 February 2020

A century ago, American nativists succeeded in establishing immigration quotas to drive up the wages of US workers. What happened next? Not what you might think, Leah Boustan tells Tim Phillips.

Bruno Caprettini, Hans-Joachim Voth, 22 February 2020

Governments of modern states need to convince men and women to fight and possibly to die for their country, putting aside their ‘selfish’ instinct to stay alive. This column examines whether welfare spending under Roosevelt’s New Deal boosted US patriotism during WWII. It finds that higher welfare spending prior to 1940 is positively correlated with greater patriotism, as measured by war bond purchases, volunteering for the US Army, and exceptionally brave acts in battle. The findings suggest that when the federal government looks out for its citizens’ needs, men and women who benefit repay the largesse by becoming more patriotic.

Anne Case, 17 February 2020

Anne Case traces the rise in 'deaths of despair' in the US back to stagnating wages and the contracting out by firms of low-skilled jobs to avoid high health insurance costs

Alejandro Cuñat, Robert Zymek, 17 February 2020

Most countries exhibit large variation in bilateral trade balances across their trade partners. This column argues that it is possible to use gravity trade models to describe the sources of this variation with greater clarity, but that a large portion of the variation still remains poorly understood. It also shows that tariffs imposed during the US-China trade war will reduce the US-China trade deficit in the long run, but only by worsening the US trade balance with other trade partners almost one-for-one.

Kym Anderson, 16 February 2020

Global alcoholic beverage markets have changed dramatically in recent years due to globalisation, income growth in emerging economies, changes in individual preferences, policy initiatives to curb socially harmful drinking, and, in particular, the dual trade policy shocks of Brexit and the US’s unilaterally imposed discriminatory tariffs. This column provides an overview of the major trends and projects the possible effects of Brexit and the US tariffs on the global alcohol market. It concludes that both shocks would reduce world trade in wine. Even countries not targeted by US tariffs can be worse off if those tariffs sufficiently reduce global consumption. 

Susan Ariel Aaronson, 05 February 2020

Individuals, citizens and firms have become increasingly dependent on data-driven services such as artificial intelligence and apps, and the same is true of defence and national security officials. This column argues that the US failure to adequately govern how firms use and monetise data affects national security in many ways. It also examines specific examples of the misuse of data and assesses the responses by the US and the EU.

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