In this paper we evaluate whether the accuracy of Finnish unemployment rate forecasts can be improved by utilising the information in the flows into and out of unemployment. We compare and contrast different methodologies for constructing the flows. Our results indicate that Bayesian vector...

We specify an empirical model of US inflation which has the dynamics of wage and price setting at its core. In the dynamic wage equation an equilibrium-correction term connects the wage level to industrial prosperity indicators. In that way, the role of wage setting in the dynamics of the...

We use a structural VAR model to study the German natural gas market and investigate the impact of the 2022 Russian supply stop on the German economy. Combining conventional and narrative sign restrictions, we find that gas supply and demand shocks have large and persistent price effects, while...

In the wake of the global energy crisis, many European countries used energy price controls to fight inflation and to stabilize the economy. Despite its wide adoption, many economists remained skeptical. In this paper, we argue that price controls should be part of the policy toolbox to respond...

The crisis periods of the past decades have highlighted the difficulty of forecasting economic indicators due to increased non-linearity and rapidly changing dynamics. To address this challenge, we introduce the Transform-Sparsify-Forecast (TSF) framework. The TSF framework first applies...

This paper presents a comprehensive framework examining fiscal sustainabil- ity in developing economies. It integrates public capital, labor informality, and global liquidity shocks in a two-sector DSGE model for a small open economy, revealing their intricate interplay and nonlinear impact on...

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...

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...

In this paper we study the macroeconomic effects of changes in federal taxes for the Canadian economy for the time period 1961:1 - 2014:4. We employ the narrative methodology of Romer and Romer (2010) and Cloyne (2013) to identify exogenous changes in federal taxes. In particular, we study, in...

The employment to output elasticity has risen from 0.65 during the 1960s and 1970s to 1.25 in the last two decades. We study the role of recent technological change in the evolution of this elasticity along the business cycle. Using the Covid-19-induced shock and an instrumental variable...