scholarly journals The Real U.S. Unemployment Rate is Twice the Official Rate, and the Phillips Curve

2019 ◽  
Author(s):  
John Komlos
Keyword(s):  
Unemployment Rate ◽  
Phillips Curve ◽  
The Real ◽  
Official Rate

Animal Spirits, Persistent Unemployment, and the Belief Function

2013 ◽  
Author(s):  
Roger E. A. Farmer
Keyword(s):  
Unemployment Rate ◽  
Phillips Curve ◽  
Belief Function ◽  
New Keynesian ◽  
Monetary Model ◽  
Posterior Odds ◽  
John Maynard Keynes ◽  
Animal Spirits ◽  
Keynesian Model ◽  
Fiscal And Monetary Policy

This chapter examines the persistence of unemployment by drawing from John Maynard Keynes' two central ideas. The first idea is that any unemployment rate can persist as an equilibrium. The second is that the unemployment rate that prevails is determined by animal spirits. The chapter introduces a three-equation monetary model termed “Farmer monetary model,” which replaces the New Keynesian Phillips curve with a belief function that describes how agents form expectations of future nominal income. The chapter builds and estimates the Farmer monetary model using U.S. data for the period from the first quarter of 1952 to the fourth quarter of 2007. It compares the Farmer monetary model to a New Keynesian model by computing the posterior odds ratio. It shows that the posterior odds favor the Farmer monetary model and concludes by discussing the implications of this finding for fiscal and monetary policy.

scholarly journals The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up?

2017 ◽  
Vol 99 (2) ◽  
pp. 258-264 ◽  
Author(s):  
Alan B. Krueger ◽  
Alexandre Mas ◽  
Xiaotong Niu
Keyword(s):  
Unemployment Rate ◽  
Rotation Group ◽  
The Real

scholarly journals THE PHILLIPS CURVE IN PORTUGAL

2013 ◽  
Vol 31 (60) ◽  
Author(s):  
Agostinho Silvestre Rosa
Keyword(s):  
Unemployment Rate ◽  
Productivity Growth ◽  
Inflation Rate ◽  
Phillips Curve ◽  
Labour Productivity ◽  
Annual Data ◽  
Short Term ◽  
Labour Productivity Growth ◽  
Average Labour Productivity ◽  
Wage Inflation

This paper estimates the Phillips curve in Portugal using the Johansen Method, with the wage inflation rate as a dependent variable, based on annual data from the period 1954-1995. The main conclusions are as follows. Firstly, in the long term, the wage inflation rate relates positively to the inflation rate and negatively to the unemployment rate, as expected. There is also a positive relationship between the wage inflation rate and the average labour productivity growth index. Secondly, in the short term, the variation of the wage inflation rate relates negatively and significantly to the error correction mechanism with a negative unitary coefficient; therefore, there is a quick and significant response to the equilibrium error between the wage inflation rate and its determinants. Besides this adjustment, the wage inflation rate responds positively to a lagged wage inflation rate. The variation in the unemployment rate and the average labour productivity growth present the expected signal, negative and positive respectively, but without significance in the short term. The dummy that refers to the April 1974 revolution is significant.

scholarly journals Occupational Situation of the Rural Farming and Landless Population in Poland in 2002-2016

2018 ◽  
Vol 18(33) (2) ◽  
pp. 156-165
Author(s):  
Włodzimierz Kołodziejczak
Keyword(s):  
Business Cycles ◽  
Unemployment Rate ◽  
Rural Population ◽  
Considerable Improvement ◽  
Source Material ◽  
Medium Term ◽  
Equilibrium Unemployment ◽  
The Real ◽  
Job Opportunities ◽  
Weighted Data

The Polish rural population is highly differentiated in terms of occupational situation, mainly because of the rural population’s involvement in individual farming. The purpose of this paper is to investigate the occupational situation of the rural farming and landless population in 2002, 2016 and 2017 in the context of non-farming job opportunities and unemployment risks. The study consists of two parts; the first one analyses the changes to the occupational situation of the rural population in the labour market; the second one identifies the risk of unemployment in selected groups of rural population. Aggregated weighted data and non-aggregated, non-published non-weighted BAEL (Polish LFS) data was used as source material. The study period witnessed a considerable improvement of the rural population’s occupational situation. However, if there is a slowdown in economic growth, the occupational situation of the rural population may deteriorate. In the short and medium term, people involved in individual farming and landless woman, i.e. the group where the real unemployment rate is much lower than equilibrium unemployment, will be particularly severely affected. In the longer term, the adverse impact of business cycles may also deteriorate the situation of landless men if their equilibrium unemployment level “follows” the real unemployment rate.

scholarly journals The Relationship between Real Wages and Output: Evidence from Pakistan

2000 ◽  
Vol 39 (4II) ◽  
pp. 1111-1126 ◽  
Author(s):  
Afia Malik ◽  
Ather Maqsood Ahmed
Keyword(s):  
Business Cycles ◽  
Interest Rates ◽  
Real Wage ◽  
Phillips Curve ◽  
Labour Supply ◽  
Nominal Wage ◽  
Purchasing Power ◽  
Real Wages ◽  
The Real ◽  
The Relationship

Information on wage levels is essential in evaluating the living standards and conditions of work and life of the workers. Since nominal wage fails to explain the purchasing power of employees, real wage is considered as a major indicator of employees purchasing power and can be used as proxy for their level of income. Any fluctuations in the real wage rate have a significant impact on poverty and the distribution of income. When used in relation with other economic variables, for instance employment or output they are valuable indicators in the analysis of business cycles. There has been a long debate regarding the relationship between real wages and the employment (output). Despite the apparent simplicity, the relationship between real wages and output has remained deceptive both theoretically and empirically. Keynes (1936) viewed cyclical movements in employment along a stable labour demand schedule thus indicating counter cyclical real wages. His deduction is in line with sticky wages and sticky expectations, which augments models like Phillips curve. In these models real wages behaved as counter-cyclical as nominal wages are slow to adjust during recession (decrease in aggregate demand and associated slowdown in price growth). Stickiness of wages or expectations shifts the labour supply over the business cycles [Abraham and Haltiwanger (1995)]. Barro (1990) and Christiano and Eichenbaum (1992) have associated these labour supply shifts with intertemporal labour-leisure substitution. This in response to temporary changes in real interest rates (fiscal policy shocks) could yield counter-cyclical real wages. However, Long and Plosser (1983) and Kydland and Prescott (1982) while studying the real business cycle models highlight on the technology shocks which leads to pro-cyclical real wages.

scholarly journals The effect of the ECB’s conventional monetary policy on the real economy: FAVAR-approach

2019 ◽  
Vol 59 (6) ◽  
pp. 2899-2924 ◽  
Author(s):  
Olli-Matti Juhani Laine
Keyword(s):  
Monetary Policy ◽  
Unemployment Rate ◽  
Industrial Production ◽  
Real Economy ◽  
Vector Autoregressive Models ◽  
Vector Autoregressive ◽  
The Real ◽  
European Central ◽  
Monetary Policy Effectiveness ◽  
Effect Of Monetary Policy

AbstractThis study applies factor-augmented vector autoregressive models to investigate the effect of the European Central Bank’s (ECB) conventional monetary policy on the real economy. More specifically, the study examines how unanticipated changes in the ECB’s policy rate have affected unemployment rate and industrial production. The effect of monetary policy on unemployment rate and industrial production is estimated to be strong and statistically significant using the data from January 1999 to July 2017 or from the pre-crisis period. However, after the beginning of the crisis the responses weaken drastically and become sometimes statistically insignificant, indicating that the effect of the ECB’s conventional monetary policy became weaker after the financial crisis. This finding is extremely interesting because one could presume either weaker or stronger effect based on economic theory. Additionally, the previous studies that have analysed the possible changes in the monetary policy effectiveness in the euro area have not found any changes (e.g. Bagzibagli in Empir Econ 47(3):781–823, 2014; Von Borstel et al. in Int J Money Finance 68:386–402, 2016).

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