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The Labor Demand and Labor Supply Channels of Monetary Policy / Sebastian Graves, Christopher K. Huckfeldt, Eric T. Swanson.
- Format:
- Book
- Author/Creator:
- Graves, Sebastian.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w31770.
- NBER working paper series no. w31770
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2023.
- Summary:
- Monetary policy is conventionally understood to influence labor demand, with little effect on labor supply. We estimate the response of labor market flows to high-frequency changes in interest rates around FOMC announcements and Fed Chair speeches and find that, in contrast to the consensus view, a contractionary monetary policy shock leads to a significant increase in labor supply: workers reduce the rate at which they quit jobs to non-employment, while non-employed individuals increase their job-seeking behavior. Holding supply-driven labor market flows constant, the overall decline in employment from a contractionary monetary policy shock becomes twice as large.
- Notes:
- Print version record
- October 2023.
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