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Dedicatory remarks On November 10, 2020,I delivered the Alejandro Justiniano Keynote Lecture at the Macroeconomics System Committee Meeting of the Federal Reserve. This lecture series, dedicated to my Chicago Fed [...]

Introduction and summary (1)The policy debate over bubbles concerns the question of what policymakers should do when faced with a rapid increase in asset prices that does not coincide with [...]

Introduction and summary In the wake of the financial crisis of 2007-08 and the Great Recession precipitated by it, a growing chorus has argued that policymakers ought to act more [...]

Introduction and summary From the second half of 2009 through the end of 2010, the U.S. labor market witnessed a systematic increase in the rate of job openings while the [...]

Introduction and summary Policymakers are often required to make decisions in the face of uncertainty. For example, they may lack the timely data needed to choose the most appropriate course [...]

Introduction and summary In the late 1990s, there was a dramatic run-up in the stock prices of various publicly traded U.S. firms, particularly those specializing in information technology and its [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.euroecorev.2004.08.001 Byline: Gadi Barlevy (a)(b), Daniel Tsiddon (c)(d) Abstract: Economists have long viewed recessions as contributing to increasing inequality. However, this conclusion is largely based on data from a period in which inequality was increasing over time. This paper examines the connection between long-run trends and cyclical variation in earnings inequality. We develop a model in which cyclical and trend inequality are related, and find that in our model, recessions tend to amplify long-run trends, i.e. they involve more rapidly increasing inequality when long-run inequality is increasing, and more rapidly decreasing inequality when long-run inequality is decreasing. In support of this prediction, we present evidence that during the first half of the 20th century, when earnings inequality was generally declining, earnings disparities indeed appeared to fall more rapidly in downturns, at least among workers at the top of the earnings distribution. Author Affiliation: (a) Federal Reserve Bank of Chicago, 230 South La Salle, Chicago, IL 60604, USA (b) NBER, Cambridge, MA, USA (c) Department of Economics, Tel Aviv University, Tel Aviv, 69978, Israel (d) CEPR, London, UK Article History: Received 4 June 2003; Accepted 29 August 2004

Introduction and summary During the past half century, policymakers in the U.S. have consistently sought to chart a stable course for economic growth. The importance accorded to this goal does [...]

The presence of credit market frictions implies that the ability to survive a recession depends on efficiency considerations alone. It is possible that recessions would have a more severe impact on some of the more efficient uses of resources while sparing those that are relatively less efficient.

Stock market crashes occur even when the fundamentals are strong. The magnitude of the crash depends on the proportion of the uninformed investors and the amount of unsophisticated passive investment in the market.