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Inflation and Real Activity over the Business Cycle
Bianchi, Francesco; Nicolò, Giovanni; Song, Dongho - National Bureau of Economic Research - 2023
control for low-frequency movements in inflation, unemployment, and growth that are pervasive in the post-WWII period. We show … that cyclical fluctuations of inflation are related to cyclical movements in real activity and unemployment, in line with …
Persistent link: https://www.econbiz.de/10014247995
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The Active Role of the Natural Rate of Unemployment during Cyclical Recoveries
Hall, Robert Ernest; Kudlyak, Marianna - National Bureau of Economic Research - 2023
We propose that the natural rate of unemployment has an active role in the business cycle, in contrast to the … Phillips-curve framework of low---often extremely low---response of inflation to unemployment could be the result of fairly … most Phillips-curve studies, that conclude that inflation has little relation to unemployment. We suggest that the flat …
Persistent link: https://www.econbiz.de/10014436979
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Spending and Job-Finding Impacts of Expanded Unemployment Benefits : Evidence from Administrative Micro Data
Ganong, Peter; Greig, Fiona E.; Noel, Pascal J.; … - National Bureau of Economic Research - 2022
We show that the largest increase in unemployment benefits in U.S. history had large spending impacts and small job …
Persistent link: https://www.econbiz.de/10013361970
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Idiosyncrasy as a Leading Indicator
Morck, Randall; Yeung, Bernard; Zhang, Lu Y. - National Bureau of Economic Research - 2022
Disequilibrating macro shocks affect different firms' prospects differently, increasing idiosyncratic variation in forward-looking stock returns before affecting economic growth. Consistent with most such shocks from 1947 to 2020 enhancing productivity, increased idiosyncratic stock return...
Persistent link: https://www.econbiz.de/10013210099
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Navigating by Falling Stars : Monetary Policy with Fiscally Driven Natural Rates
Campos, Rodolfo G.; Fernández-Villaverde, Jesús; … - National Bureau of Economic Research - 2024
We study a new type of monetary-fiscal interaction in a heterogeneous-agent New Keynesian model with a fiscal block. Due to household heterogeneity, the stock of public debt affects the natural interest rate, forcing the central bank to adapt its monetary policy rule to the fiscal stance to...
Persistent link: https://www.econbiz.de/10014512073
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Identifying Monetary Policy Shocks : A Natural Language Approach
Aruoba, S. Borağan; Drechsel, Thomas - National Bureau of Economic Research - 2024
We develop a novel method for the identification of monetary policy shocks. By applying natural language processing techniques to documents that Federal Reserve staff prepare in advance of policy decisions, we capture the Fed's information set. Using machine learning techniques, we then predict...
Persistent link: https://www.econbiz.de/10014544696
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Business, Liquidity, and Information Cycles
Bostanci, Gorkem; Ordoñez, Guillermo - National Bureau of Economic Research - 2024
Stock markets play a dual role: help allocate capital by conveying information about firms' fundamentals and provide liquidity by quickly turning stocks into cash. We propose a trading model in which these two roles are endogenously related: more intensive use of stocks for liquidity affects...
Persistent link: https://www.econbiz.de/10014544779
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Procyclical Stocks Earn Higher Returns
Goetzmann, William N.; Watanabe, Akiko; Watanabe, Masahiro - National Bureau of Economic Research - 2024
We find that procyclical stocks, whose returns comove with business cycles, earn higher average returns than countercyclical stocks. We use almost a three-quarter century of real GDP growth expectations from economists' surveys to determine forecasted economic states. This approach largely...
Persistent link: https://www.econbiz.de/10014544787
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What Can Measured Beliefs Tell Us About Monetary Non-Neutrality?
Afrouzi, Hassan; Flynn, Joel P.; Yang, Choongryul - National Bureau of Economic Research - 2024
This paper studies how measured beliefs can be used to identify monetary non-neutrality. In a general equilibrium model with both nominal rigidities and endogenous information acquisition, we analytically characterize firms' optimal dynamic information policies and how their beliefs affect...
Persistent link: https://www.econbiz.de/10014576569
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Attention Cycles
Flynn, Joel P.; Sastry, Karthik - National Bureau of Economic Research - 2024
We study how bounded rationality coevolves with the business cycle. We introduce a business-cycle model in which firms face a cognitive cost of making precise decisions. Theoretically, we characterize equilibrium with non-parametric, state-dependent stochastic choice. Firms have greater...
Persistent link: https://www.econbiz.de/10014576581