- How Low Will the Unemployment Rate Go?
- Links for 2012-04-03
- Sending the Wrong Message
- Evidence of Nominal Wage Rigidities
- From the NBER
- No Sign of an Inflation Problem
Posted: 03 Apr 2012 01:20 AM PDT
Via the Liberty Street Economics blog at the New York Fed:
How Low Will the Unemployment Rate Go?, by Jonathan McCarthy, Simon Potter, and Ayşegül Şahin, FRB NY Liberty Street Blog: ...In this post, we run ... simulations ... to see what happens to the unemployment rate if the current expansion lasts as long as any of the three most recent expansions. ... The simulated unemployment paths based on the three different scenarios are shown in the chart below. ...
Posted: 03 Apr 2012 12:06 AM PDT
Posted: 02 Apr 2012 08:28 PM PDT
I'm not sure I see the connection, but when you blog they ask you to be in the course catalog:
I really wish I'd brought a smaller computer along when they shot the picture. That thing is huge. If the message is supposed to be "look how connected we are here at the UO," that computer sends the opposite message.
Posted: 02 Apr 2012 02:17 PM PDT
This is part of a longer essay on wage growth during recessions from a San Francisco Fed Economic Letter:
Measuring nominal wage rigidities
Distribution of observed nominal wage changes
Sources: Current Population Survey (CPS) and authors calculations.
Researchers generally point to asymmetries in the distribution of observed wage changes among individual workers as evidence of nominal wage rigidities. Figure 2 plots an example of this type of wage change distribution in 2011. The dashed black line shows a symmetric normal distribution. The blue bars plot the actual distribution of nominal wages.
Posted: 02 Apr 2012 10:26 AM PDT
Some papers from the NBER that caught my interest:
How Frequent Are Small Price Changes?, by Martin S. Eichenbaum, Nir Jaimovich, Sergio Rebelo and Josephine Smith, NBER Working Paper No. 17956, March 2012: Recent empirical work suggests that small price changes are relatively common. These findings have been used to evaluate competing theories of nominal price rigidities. In this paper we use micro data from the consumer price index and a scanner data set from a national supermarket chain to reassess the importance of small price changes. We argue that the vast majority of these changes are due to measurement error. We conclude that small price changes are too small a phenomenon for macro modelers to be concerned with. [open link]
Posted: 02 Apr 2012 09:29 AM PDT
Via the Dallas Fed, once the volatile prices have been stripped out there's no evidence of inflation. If anything, inflation has been falling in recent months (before objecting that these measures do not capture actual changes in the cost of living for households, please see here):
Trimmed Mean PCE Inflation Rate, FRB Dallas: February 2012 The trimmed mean PCE inflation rate is an alternative measure of core inflation in the price index for personal consumption expenditures (PCE). It is calculated by staff at the Dallas Fed, using data from the Bureau of Economic Analysis (BEA). ...
The trimmed mean PCE inflation rate for February was an annualized 1.4 percent. According to the BEA, the overall PCE inflation rate for February was 3.8 percent, annualized, while the inflation rate for PCE excluding food and energy was 1.6 percent.
The tables below present data on the trimmed mean PCE inflation rate and, for comparison, the overall PCE inflation and the inflation rate for PCE excluding food and energy. The tables give annualized one-month, six-month and 12-month inflation rates.
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