Efraim Benmelech, Carola Frydman, 29 April 2020

The immediate economic fallout for the US economy from the coronavirus pandemic is predicted to be disastrous. In comparison, while the Spanish flu also had some economic consequences, they were mostly modest and temporary. This column evaluates the developments in the US economy during the 1918 influenza, in search of a possible explanation for the limited adverse effects of the flu despite similar social distancing requirements, albeit at a lower scale. It concludes that a large expansion in government demand can go a long way in softening the economic impact of the crisis we face today. 

Laura Kodres, 28 April 2020

Amid the uncertainty of the COVID-19 pandemic, the movements in equity markets’ around the world have mirrored the spread of the virus and its virulence. Attempts to limit market crashes, volatility, and financial contagion have taken a number of different forms. This column explores the two main policy responses available to financial market regulators – bans on short sales versus circuit breakers – and reviews them in the context of some ‘best practices’ for market regulation.

Petr Sedláček, Vincent Sterk, 25 April 2020

Startups are being hit hard by the COVID-19 pandemic and the lockdown. Introducing a ‘startup calculator’ that allows anyone to compute the aggregate employment losses under various economic scenarios, this column explores the effects of a decline in startup activity on aggregate employment. Job losses may be large and may last well beyond the pandemic itself.

Christian Bayer, Benjamin Born, Ralph Luetticke, Gernot Müller, 24 April 2020

Among the various measures announced in response to the economic fallout caused by the COVID-19 pandemic, the $2 trillion stimulus package legislated in the US at the end of March 2020 stands out in terms of size. This column quantifies the multiplier of the stimulus’s transfer component. It finds that transfers which top up unemployment benefits are particularly effective because they reduce the income risk due to the lockdown ex ante. In this case, the multiplier may be as high as 2.

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.

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