Front Matter Page
Research Department
Contents
Abstract
I. Introduction
II. Background: A Tale of Two Recessions
III. Symptoms of Labor Market Hysteresis After the GR
IV. The Model
IV.1. Adding Unemployment Hysteresis to the Model
IV.2. Simulations Matching the Actual Data
IV.3. Bayesian Estimation
V. Results: NAIRU and Potential Growth for the United States
VI. Conclusion
Appendix
A. The Complete Model
B. Micro-foundations for the Effects of NAIRU on Potential Output
Tables
1. Model Parameter Priors and Posterior Estimates
Figures
1. Real GDP Dynamics after the Two Recessions
2. Unemployment Rate in the Two Recessions
3. Employment in the Two Recessions
4. Monetary Policy in the Two Recessions
5. Federal Budget Deficit in the Two Recessions
6. Inflation in the Two Recessions
7. WEO Revisions of Actual and Potential Output
8. Efficiency of Matching between Vacancies and Workers Before and
9. Sectoral Employment after the Great Recession
10. Sectoral Employment after the Volcker Disinflation
11. Unemployment Duration
12. Illustrative Effects of Business Cycles on the NAIRU
13. Model Simulations of Impact of Negative Demand Shocks (Percent)
14. Model-Based Estimates of the Output Gap (Percent)
15. Adjusted Estimates of the Output Gap for the Volcker Disinflation
16. Adjusted Estimates of the Output Gap for the Volcker Disinflation
17. Model-based Estimates of the NAIRU (Percent)
18. Perceived Inflation Target (Percent)
19. Model-based and CBO Estimates of the NAIRU (Percent)
20. Model-based Estimates of the Potential Growth (Percent)
21. Model-based Estimates of Output Gap Shocks (Percent)
References