The Asymmetric Effects of Monetary Policy on Job Creation and Destruction

Author/Editor:

Pietro Garibaldi

Publication Date:

April 1, 1997

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper presents theory and evidence on the asymmetric effects of monetary policy on job creation and job destruction. First, it solves a dynamic matching model and it shows how interest rate changes result in an asymmetric response of job creation and destruction. Second, it looks at how changes in the federal fund rate affect gross job flows in the U.S. manufacturing industry, and it finds evidence of asymmetry. Tight policy increases job destruction and reduces net employment changes. Conversely, easy policy appears ineffective in stimulating job creation.

Series:

Working Paper No. 1997/057

Subject:

Employment Job creation Job destruction Labor Production Productivity Unemployment

Notes:

Also published in Staff Papers, Vol. 44, No. 4, December 1997.

English

Publication Date:

April 1, 1997

ISBN/ISSN:

9781451967555/1018-5941

Stock No:

WPIEA0571997

Pages:

30

Please address any questions about this title to publications@imf.org