Brookings Papers on Economic Activity最新文献

{"title":"The Power of Substitution: The Great German Gas Debate in Retrospect","authors":"Benjamin Moll, Moritz Schularick, Georg Zachmann","doi":"10.1353/eca.2023.a935431","DOIUrl":"https://doi.org/10.1353/eca.2023.a935431","url":null,"abstract":"<p><p>The Russian attack on Ukraine in February 2022 laid bare Germany's dependence on Russian energy imports and ignited a heated debate on the costs of a cutoff from Russian gas. While one side predicted economic collapse, the other side (ours) predicted \"substantial but manageable\" economic costs due to households and firms adapting to the shock. Using the empirical evidence now at hand, this paper studies the adjustment of the German economy after Russia weaponized gas exports by cutting Germany off from gas supplies in the summer of 2022. We document two key margins of adjustment. First, Germany was able to replace substantial amounts of Russian gas with imports from third countries, underscoring the insurance provided by openness to international trade. Second, the German economy reduced gas consumption by about 20 percent, driven mostly by industry (26 percent) and households (17 percent). The economic costs of demand reduction were manageable with the economy as a whole only experiencing a mild one-quarter contraction in the winter of 2022–2023 and then stagnating. Overall industrial production decoupled from production in energy-intensive sectors (which did see large drops) and declined only slightly. We draw a number of key lessons from this important case study about the insurance offered by access to global markets and the power of substitution, specifically that supply shocks have dramatically smaller costs when elasticities of substitution are very low (but nonzero) compared to a truly zero elasticity.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"10 1","pages":""},"PeriodicalIF":5.9,"publicationDate":"2024-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142084700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Health Wedge and Labor Market Inequality","authors":"Amy Finkelstein, Casey McQuillan, Owen Zidar, Eric Zwick","doi":"10.1353/eca.2023.a919363","DOIUrl":"https://doi.org/10.1353/eca.2023.a919363","url":null,"abstract":"<p><p>Over half of the US population receives health insurance through an employer with premium contributions creating a flat \"head tax\" per worker, independent of their earnings. This paper develops and calibrates a stylized model of the labor market to explore how this uniquely American approach to financing health insurance contributes to labor market inequality. We consider a partial-equilibrium counterfactual in which employer-provided health insurance is instead financed by a statutory payroll tax on firms. We find that, under this counterfactual financing, in 2019 the college wage premium would have been 11 percent lower, noncollege annual earnings would have been $1,700 (3 percent) higher, and noncollege employment would have been nearly 500,000 higher. These calibrated labor market effects of switching from head tax to payroll tax financing are in the same ballpark as estimates of the impact of other leading drivers of labor market inequality, including changes in outsourcing, robot adoption, rising trade, unionization, and the real minimum wage. We also consider a separate partial-equilibrium counterfactual in which the current head tax financing is maintained, but 2019 US health care spending as a share of GDP is reduced to the Canadian share; here, we estimate that the 2019 college wage premium would have been 5 percent lower and noncollege annual earnings would have been 5 percent higher. These findings suggest that health care costs and the financing of health insurance warrant greater attention in both public policy and research on US labor market inequality.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"224 1","pages":""},"PeriodicalIF":5.9,"publicationDate":"2024-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139739639","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"COVID-19 Credit Policies around the World: Size, Scope, Costs, and Consequences","authors":"Gee Hee Hong, Deborah Lucas","doi":"10.1353/eca.2023.a919361","DOIUrl":"https://doi.org/10.1353/eca.2023.a919361","url":null,"abstract":"<p><p>Governments deployed credit policies on a historically unprecedented scale in response to the COVID-19 pandemic. We estimate the effective size of credit policies for seven large advanced economies in terms of the incremental resources provided to firms and households—a measure that allows aggregation across credit support, forbearance, and traditional fiscal policies but that does not appear in traditional government statistics. These estimates are used to reassess the absolute and relative size of different governments' policy interventions and to evaluate whether taking credit policies into account can help explain the cross section of macroeconomic outcomes. Incremental resources increase from an average 14.5 percent of 2020 GDP when only fiscal policies are considered to 22 percent of 2020 GDP when credit policies are also taken into account. Incorporating credit policies also reduces the cross-country variation in the total size of policy interventions. With regard to fiscal cost, fair value estimates for these credit support programs average 37 percent of principal, with wide variation depending on program features. We also discuss several related measurement issues, the financial regulatory changes that accommodated these programs, the pros and cons of the different types of credit policies, and how in principle budgetary costs should be calculated versus how governments account for credit policies in practice.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"296 1","pages":""},"PeriodicalIF":5.9,"publicationDate":"2024-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139739643","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Where Are the Missing Workers? Anticipated and Unanticipated Labor Supply Changes in the Pandemic's Aftermath","authors":"Katharine G. Abraham, Lea E. Rendell","doi":"10.1353/eca.2023.a919358","DOIUrl":"https://doi.org/10.1353/eca.2023.a919358","url":null,"abstract":"<p><p>Labor force participation and average hours of work both fell sharply at the beginning of the COVID-19 pandemic. Neither had fully recovered by the end of 2022. The drop in participation between December 2019 and December 2022 implies a loss of 3 million people from the labor force; the decline in average hours over the same period translates to the equivalent of 2.6 million fewer workers. Demographic and other trend factors that predated the pandemic explain most of the participation shortfall. Taken together, COVID-19-related health effects and the persistent (though shrinking) effects of the fear of contracting COVID-19 more than explain the rest. In contrast, pre-pandemic factors account for little of the shortfall in hours. COVID-19-related health effects account for perhaps 40 percent of that decline, but we are unable to explain the majority of the hours shortfall. We speculate that the lower level of hours in the post-pandemic period may reflect a shift in the desired balance between work and other aspects of workers' lives.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"111 1","pages":""},"PeriodicalIF":5.9,"publicationDate":"2024-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139739656","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Economic Implications of the Climate Provisions of the Inflation Reduction Act","authors":"John E. T. Bistline, Neil R. Mehrotra, Catherine Wolfram","doi":"10.1353/eca.2023.a919359","DOIUrl":"https://doi.org/10.1353/eca.2023.a919359","url":null,"abstract":"<p><p>The Inflation Reduction Act (IRA) represents the largest US federal response to climate change to date. We highlight the key climate provisions and assess the act's potential economic impacts. Substantially higher investments in clean energy and electric vehicles imply that fiscal costs may be larger than projected. However, even at the high end, IRA provisions remain cost-effective. The IRA has large impacts on power sector investments and electricity prices, lowering retail electricity rates and resulting in negative prices in some wholesale markets. We find small quantitative macroeconomic effects, including a small decline in headline inflation, but macroeconomic conditions—particularly higher interest rates and materials costs—may have substantial negative effects on clean energy investment. We show that the subsidy approach in the IRA has expansionary supply-side effects relative to a carbon tax but, in a representative-agent dynamic model, is preferable to a carbon tax only in the presence of a strong learning-by-doing externality. We also discuss the economics of the industrial policy aspects of the act as well as the distributional impacts and the possible incidence of the different tax credits in the IRA.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"98 1","pages":""},"PeriodicalIF":5.9,"publicationDate":"2024-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139739645","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"India at 75: Replete with Contradictions, Brimming with Opportunities, Saddled with Challenges","authors":"Viral V. Acharya","doi":"10.1353/eca.2023.a919360","DOIUrl":"https://doi.org/10.1353/eca.2023.a919360","url":null,"abstract":"<p><p>I present a perspective on where the Indian economy stands right now. I acknowledge the contradictions that have arisen given the divergent growth path of urban, formal or (stock-market) listed India relative to rural, informal or unlisted India. I also focus on the country's immense opportunities in expanding the digital footprint of finance to last-mile borrowers. I present novel facts on the rising industrial concentration, drawing out its historical evolution, the channels that have caused it to rise recently, and its implications for product price markups and inflation. I recommend that to restore industrial balance, India increase overall competition by reducing import tariffs and reduce the pricing power of its largest conglomerates. I also propose that to restore macroeconomic balance, India reduce fiscal deficit and public sector borrowing requirements as well as rein in inflation, address gaps in skills and education, and restore female labor force participation.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"4 1","pages":""},"PeriodicalIF":5.9,"publicationDate":"2024-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139739669","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Global Dollar Cycle","authors":"Maurice Obstfeld, Haonan Zhou","doi":"10.1353/eca.2022.a901275","DOIUrl":"https://doi.org/10.1353/eca.2022.a901275","url":null,"abstract":"<p><p>The US dollar's nominal effective exchange rate closely tracks global financial conditions, which themselves show a cyclical pattern. Over that cycle, world asset prices, leverage, and capital flows move in concert with global growth, especially influencing the fortunes of emerging markets and developing economies (EMDEs). This paper documents that dollar appreciation shocks predict economic downturns in EMDEs and highlights policies countries could implement to dampen the effects of dollar fluctuations. Dollar appreciation shocks themselves are highly correlated not just with tighter US monetary policies but also with measures of US domestic and international dollar funding stress that themselves reflect global investors' risk appetite. After the initial market panic and upward dollar spike at the start of the COVID-19 pandemic, the dollar fell as global financial conditions eased; but the higher inflation that followed has induced central banks everywhere to tighten monetary policies more recently. The dollar has strengthened considerably since mid-2021 and a contractionary phase of the global financial cycle is now underway. Owing to increases in public- and business-sector debts during the pandemic, a strong dollar, higher interest rates, and slower economic growth will be challenging for EMDEs.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"33 11","pages":""},"PeriodicalIF":5.9,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167665","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Understanding US Inflation during the COVID-19 Era","authors":"Laurence Ball, Daniel Leigh, Prachi Mishra","doi":"10.1353/eca.2022.a901276","DOIUrl":"https://doi.org/10.1353/eca.2022.a901276","url":null,"abstract":"<p><p>This paper analyzes the dramatic rise in US inflation since 2020, which we decompose into a rise in core inflation as measured by the weighted median inflation rate and deviations of headline inflation from core. We explain the rise in core inflation with two factors: the tightening of the labor market as captured by the ratio of job vacancies to unemployment, and the pass-through into core inflation from past shocks to headline inflation. The headline shocks themselves are explained largely by increases in energy prices and by supply chain problems as captured by backlogs of orders for goods and services. Looking forward, we simulate the future path of inflation for alternative paths of the unemployment rate, focusing on the projections of Federal Reserve policymakers in which unemployment rises only modestly to 4.4 percent. We find that this unemployment path returns inflation to near the Federal Reserve's target only under optimistic assumptions about both inflation expectations and the Beveridge curve relating the unemployment and vacancy rates. Under less benign assumptions about these factors, the inflation rate remains well above target unless unemployment rises by more than the Federal Reserve projects.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"34 2","pages":""},"PeriodicalIF":5.9,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167662","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Panel on Shrinking the Federal Reserve Balance Sheet","authors":"Arvind Krishnamurthy, Sydney C. Ludvigson, Jonathan H. Wright","doi":"10.1353/eca.2022.a901273","DOIUrl":"https://doi.org/10.1353/eca.2022.a901273","url":null,"abstract":"&lt;span&gt;&lt;span&gt;In lieu of&lt;/span&gt; an abstract, here is a brief excerpt of the content:&lt;/span&gt;\u0000&lt;p&gt; &lt;ul&gt; &lt;li&gt;&lt;!-- html_title --&gt; Panel on Shrinking the Federal Reserve Balance Sheet &lt;!-- /html_title --&gt;&lt;/li&gt; &lt;li&gt; Arvind Krishnamurthy, Sydney C. Ludvigson, and Jonathan H. Wright &lt;/li&gt; &lt;/ul&gt; &lt;ul&gt; &lt;li&gt;&lt;!-- html_title --&gt; Lessons for Policy from Research &lt;!-- /html_title --&gt;&lt;/li&gt; &lt;li&gt; Arvind Krishnamurthy &lt;/li&gt; &lt;/ul&gt; ABSTRACT &lt;p&gt;I review lessons from the research on central bank actions over the last decade and draw out implications for expanding the Federal Reserve balance sheet (quantitative easing) and shrinking the balance sheet (quantitative tightening). As I outline, there is already enough evidence in the research to indicate the manner in which the Federal Reserve could update its policy normalization principles and plans.&lt;/p&gt; &lt;p&gt;Former Federal Reserve chairman Ben Bernanke famously quipped, in a 2014 discussion at the Brookings Institution, that \"the problem with QE is that it works in practice, but it doesn't work in theory.\" Academic and policy research on quantitative easing (QE) has come quite far over the last decade, and we are less in the dark about the workings of QE. In this paper, I review the lessons from this research and then draw out implications for expanding the Federal Reserve balance sheet (QE) and shrinking the balance sheet (quantitative tightening, or QT).&lt;/p&gt; &lt;p&gt;There are three principal lessons from the research: (1) QE works differently than conventional monetary policy in that the impacts are highest in the asset market targeted. (2) QE impacts are highest during periods of financial distress, market segmentation, and illiquidity. While this statement is likely also true of conventional policy, the effects are much more dramatic with QE. (3) QE alters the quantity of central bank reserves, and the post-2008 regulatory and economic regime implies substantially higher necessary reserve balances. I review each of these points and then turn to their implications for the formulation of rules governing QE/QT. The Fed &lt;strong&gt;[End Page 233]&lt;/strong&gt;&lt;/p&gt; &lt;br/&gt; Click for larger view&lt;br/&gt; View full resolution Figure 1. &lt;p&gt;Yield Changes by Maturity from UK QE for UK Gilts and Gilt-OIS Spreads&lt;/p&gt; &lt;p&gt;Source: Joyce and others (2011); copyright Bank of England and the Association of the International Journal of Central Banking; adapted with permission.&lt;/p&gt; &lt;p&gt;&lt;/p&gt; &lt;p&gt;currently uses QE in two ways: to provide liquidity to markets during financial illiquidity episodes (\"crisis QE\") and to lower financing costs for borrowers at a time when the zero lower bound binds (\"easing QE\"). I argue that rules for these two types of policies should differ, but that the Fed has blurred the lines between them which has led to policy errors.&lt;/p&gt; &lt;h2&gt;I. Lessons from Research&lt;/h2&gt; &lt;h3&gt;I.A. QE Works through Narrow Channels&lt;/h3&gt; &lt;p&gt;Joyce and others (2011) present data from an event study around two significant QE news dates in 2009 by the Bank of England. O","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"34 1","pages":""},"PeriodicalIF":5.9,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167663","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Working from Home Around the World","authors":"Cevat Giray Aksoy, Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, Mathias Dolls, Pablo Zarate","doi":"10.1353/eca.2022.a901274","DOIUrl":"https://doi.org/10.1353/eca.2022.a901274","url":null,"abstract":"<p><p>The pandemic triggered a large, lasting shift to work from home (WFH). To study this shift, we survey full-time workers who finished primary school in twenty-seven countries as of mid-2021 and early 2022. Our cross-country comparisons control for age, gender, education, and industry and treat the United States mean as the baseline. We find, first, that WFH averages 1.5 days per week in our sample, ranging widely across countries. Second, employers plan an average of 0.7 WFH days per week after the pandemic, but workers want 1.7 days. Third, employees value the option to WFH two to three days per week at 5 percent of pay, on average, with higher valuations for women, people with children, and those with longer commutes. Fourth, most employees were favorably surprised by their WFH productivity during the pandemic. Fifth, looking across individuals, employer plans for WFH levels after the pandemic rise strongly with WFH productivity surprises during the pandemic. Sixth, looking across countries, planned WFH levels rise with the cumulative stringency of government-mandated lockdowns during the pandemic. We draw on these results to explain the big shift to WFH and to consider some implications for workers, organization, cities, and the pace of innovation.</p></p>","PeriodicalId":51405,"journal":{"name":"Brookings Papers on Economic Activity","volume":"33 12","pages":""},"PeriodicalIF":5.9,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167664","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}