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New Evidenceon Cyclical and Structural Sources of Unemployment, Jinzhu Chen, Bharat Trehan, Prakash Kannan, Prakash Loungani

Label
New Evidenceon Cyclical and Structural Sources of Unemployment, Jinzhu Chen, Bharat Trehan, Prakash Kannan, Prakash Loungani
Language
eng
Abstract
We provide cross-country evidence on the relative importance of cyclical and structural factors in explaining unemployment, including the sharp rise in U.S. long-term unemployment during the Great Recession of 2007-09. About 75% of the forecast error variance of unemployment is accounted for by cyclical factors-real GDP changes (?Okun‘s Law?), monetary and fiscal policies, and the uncertainty effects emphasized by Bloom (2009). Structural factors, which we measure using the dispersion of industry-level stock returns, account for the remaining 25 percent. For U.S. long-term unemployment the split between cyclical and structural factors is closer to 60-40, including during the Great Recession
Bibliography note
Includes bibliographical references
resource.governmentPublication
international or intergovernmental publication
Literary Form
non fiction
Main title
New Evidenceon Cyclical and Structural Sources of Unemployment
Nature of contents
dictionaries
Responsibility statement
Jinzhu Chen, Bharat Trehan, Prakash Kannan, Prakash Loungani
Series statement
IMF Working Papers
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; 1. Average Duration of Unemployment (Weeks); 2. Duration of Unemployment (Percent of Labor Force); 3. Change in Unemployment Rate 2007-09 (Percent); II. Measuring Sectoral Shifts; 4. Stock Market Returns Dispersion Index (6-month moving average); III. Candidate Explanations for Changes Duration; 5. Impulse-Response Figures for Unemployment (Univariate Model); 6. Impulse-Response Figures for Long-Term Unemployment (Univariate Model); IV. VARs Estimated on U.S. Data; A. The Effects of Sectoral Shocks7. Impulse-Response Figures for Unemployment (VAR model)8. Impulse-Response Figures for Long-Term Unemployment (VAR model); 1. Forecast-error Variance Decomposition for the Unemployment Rate; 2. Forecast-error Variance Decomposition for the Long-Term Unemployment Rate; 9. Variance of Unemployment; B. Sectoral Shocks and Long-Term Unemployment during the Great Recession; 10. Decomposition of Long-Term Unemployment During the Great Recession; C. Structural vs. Cyclical Movements in Unemployment; 11. Estimates of Structural Unemployment; V. Sectoral Shocks Versus Uncertainty12. Dispersion Index and the Uncertainty Index13. Comparing Unemployment Responses to Dispersion and Uncertainty Shocks; 14. Variance of Unemployment; 3. Forecast-error Variance Decomposition for the Long-Term Unemployment Rate; VI. A VAR Estimated on International Data; 15. Impulse-Response Figures for Unemployment (Panel VAR Model); 4. Forecast-error Variance Decomposition for the Unemployment Rate - International Panel; VII. Conclusion; References; Footnotes
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