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Working Papers

Measuring Vacancies [Job Market Paper]

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In modern macroeconomic models job openings are a key component. Thus, when taking these model to the data we need an empirical counterpart to the theoretical concept of job openings. To achieve this, the literature relies on job vacancies measured either in survey or register data. Insofar that this concept captures the concept of job-openings well we should see a tight relationship between vacancies and subsequent hires on the micro level. To investigate this, I construct a new dataset on Swedish hires and job vacancies on the plant level covering the period 2001-2012. I show that vacancies contain little power in predicting hires above (i) whether the number of vacancies is positive and (ii) plant size. Building on these findings, I propose an alternative measure of job openings in the economy. This measure has the attractive features of (i) better predicting hiring on the plant level and (ii) providing a better fitting aggregate matching function \emph{vis-a-vis} the traditional vacancy measure. Using the new measure, the outwards shift in the Swedish Beveridge curve after the Great Recession is less pronounced.

The New Keynesian Transmission Mechanism

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with Tobias Broer, Per Krusell and Erik Öberg

The success of the New Keynesian framework stems from its capability to match the aggregate responses to innovations in monetary policy and total factor productivity (TFP). Specifically, the model can account for a negative response of output to a positive innovation in the policy rate and a negative response of employment to a positive innovation in TFP. We reexamine the transmission channel of the textbook model and show that these successful results rely on the assumption that firm profits are redistributed to working households. We contrast the textbook model to a worker-capitalist model where profits are consumed by non-working capitalists. This modification renders employment and output unresponsive to monetary policy and employment unresponsive to TFP

Work in Progress

Labor Market Flows in Sweden


with Hannes Malmberg

Measuring Vacancies in Denmark


with Hans Henrik Sievertsen

Older working papers

Interest Rate Pass-Through during the Global Financial Crisis: the case of Sweden

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with Peter Welz

A stable relationship between monetary policy rates and bank lending and deposit rates faced by consumers and companies is essential for the effective transmission of monetary policy decisions. This paper studies how changes in the policy rate set by the Swedish central bank, the Riksbank, have been transmitted to money market rates and, in turn, to retail rates before and during the financial turmoil that erupted in summer 2007. Historically, the Riksbank has been successful in effectively controlling money market rates, but during the financial turmoil the transmission of impulses from the policy rate to money market rates appears to have been weakened by elevated and volatile risk premia, although these increased less in Sweden than in the euro area, United Kingdom and United States. The pass-through from money market rates to retail rates is found to have been complete, but sluggish, before the turmoil. Pass-through was also faster into short-term loan rates for non-financial companies than for households. During the turmoil the pass-through from money market to lending rates has been preserved at short maturities, but not at longer maturities. Lack of access to long-term funding has likely played a role.

Credit Growth in Latin America

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with Olga Sulla

Banking credit to the private sector in Latin America has on average increased by 7 percent of GDP from primo 2004 to ultimo 2011, with real credit in some countries growing by up to 20 percent per year. This paper documents and analyzes the patterns of credit growth in 18 countries in Latin America and uses econometric methods to determine whether it is indicative of financial deepening or poses risks of credit booms. The strongest credit growth occurred for consumption and mortgages within the household sector and for construction within the corporate sector. At the same time credit has de-dollarized in most countries and there are some signs of maturity lengthening. To assess whether the recent credit growth is excessive two different methods are applied. First, by application of HPfilters the paper finds that credit-to-GDP levels in a number of countries are above their longterm trend. Second, using a panel co-integration approach on 107 high and mid-income countries the paper estimates a model for the credit-to-GDP levels. Comparing the actual levels of credit with the ones predicted by the model we find that some countries in Latin America show significant and positive deviations. These results indicate the existence of a certain level of risk in the recent credit developments.

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