Measuring Labor Supply and Demand Shocks During Covid-19 PDF Download
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Author: Pedro Brinca
Publisher:
ISBN:
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Languages : en
Pages : 0
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We measure labor demand and supply shocks at the sector level around the COVID-19 outbreak by estimating a Bayesian structural vector autoregression on monthly statistics of hours worked and real wages. Most sectors were subject to large negative labor supply and demand shocks in March and April, with substantial heterogeneity in the size of shocks across sectors. Our estimates suggest that two-thirds of the drop in the aggregate growth rate of hours in March and April 2020 are attributable to labor supply. We validate our estimates of supply shocks by showing that they are correlated with sectoral measures of telework.
Author: Pedro Brinca
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We measure labor demand and supply shocks at the sector level around the COVID-19 outbreak by estimating a Bayesian structural vector autoregression on monthly statistics of hours worked and real wages. Most sectors were subject to large negative labor supply and demand shocks in March and April, with substantial heterogeneity in the size of shocks across sectors. Our estimates suggest that two-thirds of the drop in the aggregate growth rate of hours in March and April 2020 are attributable to labor supply. We validate our estimates of supply shocks by showing that they are correlated with sectoral measures of telework.
Author: Pedro Brinca
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Mr. Sonali Das
Publisher: International Monetary Fund
ISBN: 1513587390
Category : Business & Economics
Languages : en
Pages : 26
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Book Description
This paper examines the role of sectoral spillovers in propagating sectoral shocks in the broader economy, both in the past and during the COVID-19 pandemic. In particular, we study how shocks that occur within a sector itself and spillovers from shocks to other sectors affect sectoral activity, for a large sample of countries from 1995 to 2014. We find that both supply and demand shocks—measured as changes in, respectively, productivity and government purchases at the sector level—have large spillover effects on sector-level gross value added and on a sector’s share of the economy. We then use these historical estimates, together with the network structure of global production, to quantify the spillovers from the economic shock associated with the pandemic. We find spillover effects to be sizeable, making up a significant fraction of the overall decline in activity in 2020.Our results have implications for the design of policies with a sectoral dimension.
Author: Cem Çakmaklı
Publisher:
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Category :
Languages : en
Pages :
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Abstract: We quantify the macroeconomic effects of COVID-19 for a small open economy by calibrating a SIR-multi-sector-macro model to Turkey. Sectoral supply shocks are based on the proximity requirements in each sector and the ability to work from home. Physical proximity determines the supply shock through its effect on infection rates. Sectoral demand shocks incorporate domestic and foreign demand, both of which adjust with infection rates. We calibrate demand shocks during COVID-19 using real-time credit card purchase data. Our results show that the optimal policy, which yields the lowest economic cost and saves the maximum number of lives, can be achieved under a full lockdown of 39 days. Economic costs are much larger for an open economy as the shocks are amplified through the international production network. A decline in foreign demand leads to losses in domestic sectors through international input-output linkages, accounting for a third of the total output loss. In addition, the reduction in capital flows deprives the network from its trade financing needs, where sectors with larger external finance needs experience larger losses. The policy options are limited given sparse fiscal resources to fight the pandemic domestically, while serving the external debt. We present historical evidence from 2001 crisis of Turkey, when fiscal, monetary and exchange rate policies were employed altogether to deal with a triple crisis of balance of payments, banking, and sovereign debt
Author: Daniel S. Hamermesh
Publisher: Princeton University Press
ISBN: 9780691025872
Category : Business & Economics
Languages : en
Pages : 466
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Book Description
In this book Daniel Hamermesh provides the first comprehensive picture of the disparate field of labor demand. The author reviews both the static and dynamic theories of labor demand, and provides evaluative summaries of the available empirical research in these two subject areas. Moreover, he uses both theory and evidence to establish a generalized framework for analyzing the impact of policies such as minimum wages, payroll taxes, job- security measures, unemployment insurance, and others. Covering every aspect of labor demand, this book uses material from a wide range of countries.
Author: Harri Kemp
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
We estimate the role of (pre-Ukraine war) supply disruptions in constraining the Covid-19 pandemic recovery, for several advanced economies and emerging markets, and globally. We rely on two approaches. In the first approach, we use sign-restricted Vector Auto Regressions (SVAR) to identify supply and demand shocks in manufacturing, based on the co-movement of surveys on new orders and suppliers’ delivery times. The effects of these shocks on industrial production and GDP are recovered through a combination of local projection methods and the input-output framework in Acemoglu et al. (2016). In the second approach, we use the IMF’s G20 model to gauge the importance of supply shocks in jointly driving activity and inflation surprises. We find that supply disruptions subtracted between 0.5 and 1.2 percent from global value added during the global recovery in 2021, while also adding about 1 percent to global core inflation that same year.
Author: Cem Çakmaklı
Publisher:
ISBN:
Category : COVID-19 (Disease)
Languages : en
Pages : 70
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Book Description
The COVID-19 crisis has the potential to turn into the biggest emerging market (EM) crisis since 1980s. We quantify the macroeconomic effects of COVID-19 for a small open economy by calibrating a SIR-multi-sector-macro model to Turkey. We measure sectoral supply shocks utilizing teleworking and physical job proximity, and sectoral demand shocks with credit card purchases. Both shocks are also affected from changing infection rates under different lockdown scenarios. Our results show that the optimal policy, which yields the lowest economic cost and saves the maximum number of lives, can be achieved under a full lockdown. Being an open economy amplifies the economic costs through two main channels. First, the demand shock has domestic and external components. Second, the initial shock is magnified due to domestic and international input-output linkages. The policy options are limited given the low fiscal space to fight the pandemic and urgent external finance needs to rollover the foreign currency debt. We draw parallels between the policies employed during 2001 crisis in Turkey and discuss pros and cons of policy options to deal with the economic fallout from COVID-19.
Author: Chris Redl
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 49
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Book Description
This paper provides a decomposition of GDP and its deflator into demand and supply driven components for 12 Asian countries, the US and Europe, following the forecast error-based methodology of Shapiro (2022). We extend that methodology by (1) considering a wide range of statistical forecasting models, using the optimal model for each country and (2) provide a measure idiosyncratic demand and supply movements. The latter provides, for example, a distinction between aggregate demand driven inflation and, inflation driven by large shocks in only a small number of sectors. We find that lockdowns in 2020 are explained by a mix of demand and supply shocks in Asia, but that idiosyncratic demand shocks played a significant role in some countries. Supply factors played an important role in the post-COVID recovery, primarily in 2021, with demand factors becoming more important in 2022. The mix of shocks during the sharp increase in inflation in 2021-22 differs by country, with large and advanced economies generally experiencing more supply shocks (China, Australia, Korea), while emerging markets saw significant demand pressures pushing up prices (Indonesia, Malaysia, Philippines, Vietnam, Thailand). We illustrate the usefulness of the industry level shocks in two applications. Firstly, we consider whether industry supply shocks have created demand-like movements in aggregate prices and quantities, so-called Keynesian supply shocks. We find evidence for this mechanism in a minority of countries in our Asia sample, as well for Europe and the USA, but that these results are driven by the COVID-19 event. Secondly, we use the granularity of the industry shocks to construct country-level GDP shocks, driven by idiosyncratic movements at the industry level, to study cross country growth spillovers for the three large economic units in our sample: China, Europe and the US.
Author: Franz Ulrich Ruch
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper quantifies global demand, supply, and uncertainty shocks and compares two major global recessions: the 2008-09 Great Recession and the COVID-19 pandemic. Two alternative approaches are used to decompose economic shocks: text mining techniques on earning call transcripts and a structural Bayesian vector autoregression model. The results highlight sharp contrast in the size of supply and demand shocks over time and across sectors. While the Great Recession was characterized by demand shocks, COVID-19 caused sizable disruptions to both demand and supply. These shocks were broad-based with varying relative importance across major sectors. Furthermore, certain sub-sectors, such as professional and business services, internet retail, and grocery/department stores, fared better than others during the pandemic. The results imply that both targeted policies and conventional countercyclical fiscal and monetary policy can accelerate the economic recovery. Large demand shocks highlight an environment of deficient demand with countercyclical policy calibrated to the size of these shocks.
Author: Mr. Philip Barrett
Publisher: International Monetary Fund
ISBN: 1513587900
Category : Business & Economics
Languages : en
Pages : 23
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Book Description
The COVID-19 pandemic has led to a severe global recession with differential impacts within and across countries. This paper examines the possible persistent effects (scarring) of the pandemic on the economy and the channels through which they may occur. History suggests that deep recessions often leave long-lived scars, particularly to productivity. Importantly, financial instabilities—typically associated with worse scarring—have been largely avoided in the current crisis so far. While medium-term output losses are anticipated to be lower than after the global financial crisis, they are still expected to be substantial. The degree of expected scarring varies across countries, depending on the structure of economies and the size of the policy response. Emerging market and developing economies are expected to suffer more scarring than advanced economies.
