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The Asymmetric Effects of Monetary Policy on Job Creation and Destruction
Author:
Mr. Pietro Garibaldi
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Series:
IMF Working Papers
Volume/Issue:
Volume 1997: Issue 057
Language:
English
Publication Date:
01 Apr 1997
DOI:
https://doi.org/10.5089/9781451967555.001
ISBN:
9781451967555
ISSN:
1018-5941
Pages:
30
Keywords:
WP; monetary policy; money supply; Transmission of Monetary Policy; Job Creation; Job Destruction; Search Models; net employment change; firm behavior; job flow; reservation productivity; equilibrium unemployment; inflation rate; job creation condition; policy switch; Employment; Productivity; Unemployment; Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper presents theory and evidence on the asymmetric effects of monetary policy on job creation and job destruction. First, it solves a dynamic matching model and it shows how interest rate changes result in an asymmetric response of job creation and destruction. Second, it looks at how changes in the federal fund rate affect gross job flows in the U.S. manufacturing industry, and it finds evidence of asymmetry. Tight policy increases job destruction and reduces net employment changes. Conversely, easy policy appears ineffective in stimulating job creation.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund