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Using proprietary data from AngelList Talent, we study how startup job seekers' search and application behavior changed during the COVID-19 downturn. We find that workers shifted their searches and applications away from less-established startups and toward more-established ones, even within the same individual over time. At the firm level, this shift was not offset by an influx of new job seekers. Less-established startups experienced a relative decline in the quantity and quality of applications, ultimately affecting their hiring. Our findings uncover a flight-to-safety channel in the labor market that may amplify the procyclical nature of entrepreneurial activities. [ABSTRACT FROM AUTHOR]

We develop a quantitative model with imperfections in domestic and international financial markets that generates strong effects of U.S. monetary policy on emerging markets (EMs). Financial imperfections prevent arbitrage both between local EM lending and borrowing rates, and between local-currency and dollar borrowing rates. An adverse feedback effect between financial health and external conditions amplifies the domestic "financial accelerator," leading to large cross-border spillovers of U.S. monetary policy shocks. The model implies a link between uncovered interest parity violations and local credit spreads, a prediction we show the data strongly supports. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

We explore whether expectations, quantified by GDP changes, explain period fertility patterns observed in post-recession spells. Negative expectations emerge with economic recessions and prevail quickly. They fade away slowly as the economy rebounds. That slow reduction in negative expectations may warrant the continuation of the fertility decline during the recovery years. Differences in fertility between countries may be attributed to the severity of the recession (negative expectations) and the subsequent rates of economic growth (positive expectations). Through a cross-country analysis in 35 OECD countries and a regional analysis across 25 European countries, we found that the higher the increase in GDP per capita between 2010 and 2019, the less the decline in period fertility rates. [ABSTRACT FROM AUTHOR]

We introduce a novel multinomial logistic model for detecting and forecasting concurrent recessions and bear markets across multiple countries. Our framework leverages cross-country panel features and provides additional information for robust analysis. Through a comprehensive simulation study, we demonstrate the computational efficiency and accuracy of our model, even when handling multiple binary indicators. Applying our framework to empirical data from the United States, the UK, and Euro Area, we find that the multinomial logistic model produces superior medium-term forecasting of concurrent recession and bear market events across countries compared to multiple independent single logistic models. Additionally, our counterfactual analysis reveals that specific events, such as a recession and bear market in the United States, along with the tightening of financial conditions and a negative interest rate spread in the United States, increase the probability of concurrent and individual recession and bear market occurrences in the UK and Euro Area. [ABSTRACT FROM AUTHOR]

Many firm-level studies use aggregate uncertainty to proxy for firm-level uncertainty. Providing support for this strategy, we analyse the extent to which firm-level uncertainty is affected by aggregate uncertainty. Firm-level uncertainty is constructed from a large and monthly panel dataset of manufacturing firms. We find that aggregate uncertainty is associated positively and robustly with firm-level uncertainty. This correlation holds across different types of domestic and international measures of aggregate uncertainty. However, the extent of the correlations is heterogeneous and depends on certain firm characteristics and the state of the business cycle. For example, the widely used economic policy uncertainty index matters to all firms' uncertainty only in recessionary periods, while it is relevant over the entire business cycle only to large firms' uncertainty. [ABSTRACT FROM AUTHOR]

In this paper, we consider conditional measures of lead-lag relations between aggregate growth and industry-level cash flow growth in the United States. Our results show that firms in leading industries pay an average annualized return 3.6 |$\%$| higher than that of firms in lagging industries. Using both time-series and cross-sectional tests, we estimate an annual pure timing premium ranging from 1.2 |$\%$| to 1.7 |$\%$|⁠. This finding can be rationalized in a model in which (a) agents price growth news shocks, and (b) leading industries provide valuable resolution of uncertainty about the growth prospects of lagging industries. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

The data-generating process underlying productivity includes both trend and business cycle shocks, generating counterfactuals for prices under full information. In practice, agents' inability to immediately distinguish between the two shocks creates "rational confusion": each shock inherits properties of its counterpart. This confusion magnifies the perceived share of permanent shocks and implies that, contrary to canonical frameworks, transitory shocks are the main driver of long-run risk through trendy business cycles. With learning, the equity premium turns positive, while investment and valuation ratios become procyclical, as in the data. Consequently, rational confusion is key for reconciling disciplined macro-dynamics with equilibrium Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic caused a significant decline in output, as well as economic policies aimed at mitigating the negative effects of the pandemic. Both of these factors had an impact on the labour market. This paper investigates changes in employment across groups of workers during the coronavirus pandemic in Poland and the effect of output on these changes. Firstly, it examines changes in employment growth rates across different groups of workers in 2020. Secondly, the paper analyses the impact of the coronavirus crisis on employment by comparing actual and predicted employment growth during the pandemic period (2020). Using Okun’s law, Ordinary Least Squares, and quarterly data, the elasticities of employment growth with respect to GDP growth in the pre-pandemic period (2003–2019) are calculated. These elasticities are then used to estimate projected employment growth during the pandemic. The results suggest that the total employment response to output change was relatively small, compared to the historical pattern. However, the response was unequal across groups of workers. The youngest workers, particularly women, and those with temporary employment contracts were most affected by the pandemic.

External shocks have a notable influence on the macroeconomic fluctuations of emerging economies. However, there is limited theoretical and empirical evidence on how dependence on a single commodity export affects the transmission of external shocks in these economies. This study uses data from 1998 to 2019 to estimate a Bayesian Vector Autoregressive (BVAR) model for the economies of Ethiopia, Morocco, Nigeria, and South Africa, focusing on the price of their leading export commodities. The study examines the relationship between fluctuations in export commodity prices and economic activity over time. Most of the findings are consistent with the theoretical framework and empirical evidence on emerging economies, which typically react to external shocks, although the responses vary across economies. The study shows that a shock to export commodity prices induces a more pronounced output response in low-income economies with lower shock-absorbing capacity. Export commodity prices are identified as a crucial transmission channel of external shocks to emerging market economies, highlighting the importance of paying distinct attention to this sector in macroeconomic modeling. The results are robust to different prior specifications and choices of lag lengths for exogenous variables. [ABSTRACT FROM AUTHOR]

In recent times, various crises have negatively affected the financial stability, job security, and health of countless individuals. According to research, different factors that operate at both the individual and contextual levels can play a prominent role in influencing people's self-employment during periods of economic downturn. This study investigates the changes in the likelihood of self-employment by gender and age across various contexts following sudden shocks. By analyzing the intersection of occupational choice and business cycle theories, this research offers insights into how crises affect people's ability to work for themselves. Using a sample of over 250,000 individuals from sixteen countries and applying a multilevel binary logistic regression analysis, the results confirm that women and older individuals are less inclined to be self-employed in general. However, unexpected economic recessions may lead to a slight increase in their likelihood of self-employment. Furthermore, when women and seniors live in a higher GDP per capita context, this context positively moderates the relationship between gender, age, and the propensity for entrepreneurship. These findings offer valuable insights for policymakers seeking to promote resilient self-employment among vulnerable individuals for post-crisis recovery. [ABSTRACT FROM AUTHOR]

This study examines the influence of heterogeneous expectations between buyers and sellers on housing market cycles. We propose an agent-based model that integrates houses into a Sugarscape model for analyzing housing market dynamics. Our model incorporates spatial factors into pricing by requiring agents to evaluate a property's value based on its location. Agents have limited information because they base their decision-making on spatial information. We investigate the impact of agents' visual range and the heterogeneity of their expectations regarding housing prices. Our simulations with different vision levels show that as agents expand their field of vision, the housing market experiences heightened buying competition, thereby increasing both average housing prices and market volatility. Simulation results with different heterogeneity levels show that when people have more homogeneous expectations, the housing market becomes more volatile. As heterogeneity decreases, the volatility of house prices increases more rapidly, implying that agents' homogeneous expectations reinforce feedback in the system, leading to higher volatility and more complex dynamics. [ABSTRACT FROM AUTHOR]

AbstractVladimir Bazarov (1874–1939) tried to construct a monistic theory of cycles and crises on the basis of energy. His analysis of energy principles leads him, in a second step, to put the emphasis on productive forces and labour productivity, whose behaviour plays a determining role in the manifestation of both the cycle and the crisis. Finally, in empirical and statistical terms, the dynamics of labour productivity and of most of the economic series in Bazarov’s model are considered to be the result of a moving stochastic equilibrium (different from the purely mechanic dynamic equilibrium). [ABSTRACT FROM AUTHOR]

Using UK data, we present greater empirical detail on the puzzling firm dynamics that emerged during coronavirus disease 2019 (COVID-19). We show that firm entry increased during the pandemic across several countries, and this contrasts with typical recessions where firm entry declines. Additionally, the rise in firm entry is driven by individual entrepreneurs creating companies for the first time, particularly in online retail. We find evidence that firm creation responded significantly to declines in retail footfall and that firms created during the pandemic are more likely to exit and less likely to post jobs. Overall, this implies that despite surging firm creation during the pandemic, the overall employment effect is limited. Finally, we find that the primary contributor to limited employment creation is the shift in ownership composition of new entrants during COVID. [ABSTRACT FROM AUTHOR]

This paper examines the relative significance of oil supply, oil demand, and monetary policy shocks in explaining US macroeconomic variations. We analyze impulse response functions and variance decomposition to assess the relative importance of these shocks. Using a Bayesian structural VAR framework and the penalty function approach, we identify the shocks of interest. We find that oil supply shocks explain less than 3% of the variation in output, but have a relatively larger impact on inflation, accounting for around 13% of the inflation variation. Oil demand shocks explain 3% of output variation, but contribute significantly to inflation variation (around 16%). In contrast, monetary policy shocks have a greater influence on output, explaining approximately 13% of the observed variation. Monetary policy shocks are also the most influential source of inflation variation, contributing over 24% to the overall variation. Based on historical variance decomposition, we find that the recent inflation surge is attributable to both monetary expansion and oil supply factors. Overall, the study highlights the dominance of monetary policy shocks in explaining US macroeconomic fluctuations, with oil supply and demand shocks playing secondary roles. [ABSTRACT FROM AUTHOR]

We study the relation between trade credit, asset prices, and production-network linkages. Empirically, firms extending more trade credit earn 7.6 |$\%$| p.a. lower risk premiums and maintain longer relationships with customers. Using a production-based model, we quantitatively explain these novel facts. Trade credit reduces the departure probability of high-quality customers, thereby reducing firms' exposures to systematic costs incurred in finding new customers. The mechanism predicts that the aggregate amount of trade credit proxies for customer-search costs and that suppliers with shorter-duration links to customers command higher expected returns. We confirm these and other novel predictions in the data. [ABSTRACT FROM AUTHOR]

While recessions typically affect men's employment more adversely than women's in the USA, the COVID-19 recession was an exception to this trend. In this paper, we focus on the veteran population and ask whether COVID-19 affected employment outcomes differently for veteran women than veteran men. Using Current Population Survey data, we find that the COVID-19 recession had less serious effects on veteran women relative to veteran men in multiple aspects of employment conditions. We offer potential explanations for this finding and ultimately provide evidence of heterogeneity in labor market experiences based on types of recessions, gender, and population subgroups. [ABSTRACT FROM AUTHOR]

Based on a multisector general equilibrium framework, we show that the sectoral elasticity of substitution plays the key role in the evolution of asymmetric tails of macroeconomic fluctuations and the establishment of robustness against productivity shocks. A non-unitary elasticity of substitution renders a nonlinear Domar aggregation, where normal sectoral productivity shocks translate into non-normal aggregated shocks with variable expected output growth. We empirically estimate 100 sectoral elasticities of substitution, using the time-series linked input-output tables for Japan and find that the production economy is elastic overall, relative to a Cobb-Douglas economy with unitary elasticity. In addition to the previous assessment of an inelastic production economy for the USA, the contrasting tail asymmetry of the distribution of aggregated shocks between the USA and Japan is explained. Moreover, the robustness of an economy is assessed by expected output growth, the level of which is led by the sectoral elasticities of substitution under zero-mean productivity shocks. [ABSTRACT FROM AUTHOR]

This paper evaluates the macroeconomic effects of monetary policy for a central bank digital currency rule with traditional monetary policy in an open environment. We build a dynamic stochastic general equilibrium small open model economy with interest-bearing central bank digital currency assets. The redistribution of asset holdings and the change in asset price are the two pathways through which a retail central bank digital currency rule under the traditional monetary policy affects the macroeconomy. Fiat's digital and traditional monetary policies complement one another in lowering macroeconomic fluctuations. As a result, the real exchange rate, current accounts, and consumption are more stable in transmitting foreign shocks. These results occur when price-based or quantitative-based fiat digital monetary policy parallels traditional price-based monetary policy.