## Monetary Policy Under Labor Market Power

_IMF Working Papers, July 1, 2022_

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## Bibliographic details
- Authors: Anastasia Burya, Rui Mano, Yannick Timmer, Anke Weber
- Published: July 1, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400211812.001

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### Authors and publication
- By Anastasia Burya, Rui Mano, Yannick Timmer, Miss Anke Weber
- July 1, 2022
- IMF Working Papers, Working Paper No. 2022/128
- Pages: 46
- Volume: 2022
- Issue: 128
- DOI: https://doi.org/10.5089/9798400211812.001
- Stock No: WPIEA2022128
- ISBN: 9798400211812
- ISSN: 1018-5941
- Citation preview shown with access date: accessed 9/16/2026

### Data and approach
- Uses the near universe of online vacancy postings in the U.S.
- Combines empirical analysis with a search and matching model where firms can attract workers by either offering higher wages or posting more vacancies.

### Main empirical findings
- Labor market power amplifies the labor demand effects of monetary policy.
- Labor market power does not disproportionately affect wage growth.
- Vacancy postings that do not require a college degree or technology skills are more responsive to monetary policy, especially when firms have labor market power.
- These patterns help explain:
  - The “wageless” recovery after the 2008 financial crisis.
  - The flattening of the wage Phillips curve, especially for the low-skilled, who experienced stagnant wages but a robust decline in unemployment.

### Theoretical mechanism
- A search and matching model where firms can attract workers via:
  - Offering higher wages, or
  - Posting more vacancies
- This model can rationalize the empirical findings that monetary policy effects on labor demand are amplified by labor market power, without producing proportionate wage responses.

### Key subjects and keywords
- Subject: Employment; Labor; Labor demand; Labor markets; Labor share; Unemployment rate; Wages
- Keywords: Employment; Global; Labor demand; labor demand effects of monetary policy; Labor market power; Labor markets; Labor share; Monetary Policy; monetary policy shock; technology skill; Unemployment rate; Vacancies; vacancy posting; wage Phillips curve; Wages

*IMF Working Paper: "Monetary Policy Under Labor Market Power", IMF Working Papers 2022, 128 (2022), DOI: https://doi.org/10.5089/9798400211812.001*

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_Source: https://www.imf.org/en/publications/wp/issues/2022/07/01/monetary-policy-under-labor-market-power-520239_