Universität Bonn

Department of Economics

MEF Seminar Wintersemester 2021/22

Christina Patterson (Univ. of Chicago) 03.11.2022

We analyze a quasi-experiment of monetary policy and the labor market in Sweden during 2010–2011, where the central bank raised the interest rate substantially while the economy was still recovering from the Great Recession. We argue that this tightening was a large, credible, and unexpected deviation from the central bank’s historical policy rule. We show that this shock increased unemployment broadly, but the increase in unemployment varied somewhat across different types of workers, with low-tenure workers in particular being highly affected, and less across different types of firms. Moreover, we find that the structure of the labor market amplified the effects of monetary policy, as workers in sectors with more rigid wage contracts saw larger increases in unemployment.
Wednesday, 03.11.2021
"Monetary Policy and the Labor Market: A Quasi-Experiment in Sweden"
Target groups



via Zoom
not required
Institute for Macroeconomics and Econometrics
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