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Kimball's failed replication of Reinhart-Rogoff finding cited in argument for tempered public response to social science research results

Edin and Shaefer's book on destitute families in America reviewed in NYT

Johnston says rate of daily marijuana use among college students now greater than rate of daily cigarette smoking

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Deirdre Bloome wins ASA award for work on racial inequality and intergenerational transmission

Bob Willis awarded 2015 Jacob Mincer Award for Lifetime Contributions to the Field of Labor Economics

David Lam is new director of Institute for Social Research

Elizabeth Bruch wins Robert Merton Prize for paper in analytic sociology

Next Brown Bag

Monday, Oct 12
Joe Grengs, Policy & Planning for Social Equity in Transportation

Why does trend growth affect equilibrium employment? A new explanation of an old puzzle

Publication Abstract

Elsby, Michael W.L., and Matthew D. Shapiro. 2012. "Why does trend growth affect equilibrium employment? A new explanation of an old puzzle." American Economic Review, 102(4): 1378-1413.

That the employment rate appears to respond to changes in trend growth is an enduring macroeconomic puzzle. This paper shows that, in the presence of a return to experience, a slowdown in productivity growth raises reservation wages, thereby lowering aggregate employment. The paper develops new evidence that shows this mechanism is important for explaining the growth-employment puzzle. The combined effects of changes in aggregate wage growth and returns to experience account for all the increase from 1968 to 2006 in nonemployment among low-skilled men and for approximately half the increase in nonemployment among all men.

DOI:10.1257/aer.102.4.1378 (Full Text)

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