Long-term unemployment can make any worker progressively less employable, even after the economy strengthens.
Individuals out of work for an extended period can become less employable as they lose the specific skills acquired in their previous jobs and also lose the habits needed to hold down any job.
Policy makers should be compelled to take action given the serious costs of long-term unemployment when overall unemployment is already high. A week of unemployment is worse when it is experienced as part of a longer spell.
Labor force participation peaked in early 2000, so its decline began well before the Great Recession. A portion of that decline clearly relates to the aging of the baby boom generation. But the pace of decline accelerated with the recession.
A crucial responsibility of any central bank is to control inflation, the average rate of increase in the prices of a broad group of goods and services.
American workers have faced serious difficulties in the labor market since the first oil shock in 1973. Since that time, the pace of productivity advance has slowed for reasons which are still not understood, lowering the rate at which living standards have advanced.
Increased business sales would almost certainly raise the productive capacity of the economy by encouraging additional capital spending, especially if accompanied by reduced uncertainty about future prospects.
It seems to me that women have made an awful lot of progress, but they probably remain underrepresented at the highest levels of most organizations, for a variety of reasons. And it’s probably going to take a long time to change that.
During the 1970s, inflation expectations rose markedly because the Federal Reserve allowed actual inflation to ratchet up persistently in response to economic disruptions – a development that made it more difficult to stabilize both inflation and employment.
Maturity transformation is a central part of the economic function of banks and many other types of financial intermediaries.
It slightly worries me that when people find a problem, they rush to judgment of what to do.
A U.K. vote to exit the European Union could have significant economic repercussions.
I’ve been collecting rocks since I was 8 and have over 200 different specimens.
An important factor influencing intergenerational mobility and trends in inequality over time is economic opportunity.
Productivity depends on many factors, including our workforce’s knowledge and skills and the quantity and quality of the capital, technology, and infrastructure that they have to work with.
In my junior year, I studied geology on Saturday mornings at the Museum of Natural History. Mineralogy has always been a major interest.
The pace of increases in labor compensation provides another possible indicator, albeit an imperfect one, of the degree of labor market slack.
Productivity growth, however it occurs, has a disruptive side to it. In the short term, most things that contribute to productivity growth are very painful.
Food and energy account for a significant portion of household budgets, so the Federal Reserve’s inflation objective is defined in terms of the overall change in consumer prices.
Sometimes you have to make decisions without knowing all that you would like to know That’s part of the job.
The Global Financial Crisis and Great Recession posed daunting new challenges for central banks around the world and spurred innovations in the design, implementation, and communication of monetary policy.
Will capitalist economies operate at full employment in the absence of routine intervention? Certainly not. Are deviations from full employment a social problem? Obviously.
When the time comes to raise rates, I do think there will be some benefits that flow through to savers.
By putting downward pressure on interest rates, the Fed is trying to make financial conditions more accommodative – supporting asset values and lower borrowing costs for households and businesses and thus encouraging the spending that spurs job creation and a stronger recovery.
It is hard to have great confidence in predicting what market reactions to Fed decisions will be.
Firms are not always willing to cut wages, even if there are people lined up outside the gates to work. So why don’t they?
Housing wealth – the net equity held by households, consisting of the value of their homes minus their mortgage debt – is the most important source of wealth for all but those at the very top.
In government institutions and in teaching, you need to inspire confidence. To achieve credibility, you have to very clearly explain what you are doing and why. The same principles apply to businesses.
It’s extremely important for our banks to have more capital, higher quality capital.
Paying interest on reserve balances enables the Fed to break the strong link between the quantity of reserves and the level of the federal funds rate and, in turn, allows the Federal Reserve to control short-term interest rates when reserves are plentiful.
For decades, the pace of technological change in manufacturing has outstripped that in the economy as a whole. And, so, firms – manufacturing firms – have found it easier to continue producing by – with – reducing their workforces.
The financial crisis and the Great Recession demonstrated, in a dramatic and unmistakable manner, how extraordinarily vulnerable are the large share of American families with very few assets to fall back on. We have come far from the worst moments of the crisis, and the economy continues to improve.
We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.
To me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target.
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