In this paper, we provide compelling evidence that cyclical factors account for the bulk of the post-2007 decline in the U.S. labor force participation rate. We then proceed to formulate a stylized New Keynesian model in which labor force participation is essentially acyclical during “normal...

This paper studies whether labor market mismatch played an important role for labor market dynamics during the COVID-19 pandemic. We apply the framework of Sahin and others (2014) to the US and the UK to measure misallocation between job seekers and vacancies across sectors until the third...

The output effects of 2009 fiscal expansions have been hotly debated. But the discussion of fiscal multipliers is even more relevant now that several European countries have had to quickly retract their stimulus measures in an effort to regain market confidence. Using regime-switching VARs we...