The Asymmetric Effects of Monetary Policy on Job Creation and Job Destruction
IMF Working Papers, April 1, 1997
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- The Asymmetric Effects of Monetary Policy on Job Creation and Job Destruction
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Bibliographic details
- Authors: Pietro Garibaldi
- Published: April 1, 1997
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451967555.001
Summary
- Presents theory and evidence on the asymmetric effects of monetary policy on job creation and job destruction.
- Two-part approach:
- Solves a dynamic matching model showing how interest rate changes result in an asymmetric response of job creation and destruction.
- Empirical analysis of how changes in the federal fund rate affect gross job flows in the U.S. manufacturing industry, finding evidence of asymmetry.
Theoretical framework
- Uses a dynamic matching model.
- Key theoretical result: interest rate changes generate an asymmetric response between job creation and job destruction.
Empirical findings
- Data focus: gross job flows in the U.S. manufacturing industry.
- Main empirical conclusions:
- Tight policy increases job destruction and reduces net employment changes.
- Easy policy appears ineffective in stimulating job creation.
Subject matter and keywords
- Subject: Employment, Job creation, Job destruction, Labor, Production, Productivity, Unemployment
- Keywords: Employment, equilibrium unemployment, Europe, firm behavior, inflation rate, Job Creation, job creation condition, Job Destruction, job flow, monetary policy, money supply, net employment change, policy switch, Productivity, reservation productivity, Search Models, Transmission of Monetary Policy, Unemployment, WP
Content in this bundle
- The Asymmetric Effects of Monetary Policy on Job Creation and Destruction - WP/97/57