Pascal Michaillat
This paper develops an algorithm for detecting US recessions in real time. The algorithm constructs hundreds of millions of recession classifiers by combining unemployment and vacancy data. Classifiers are then selected to avoid both false…
To answer this question, we develop a new Sahm-type recession indicator that combines vacancy and unemployment data. The indicator is the minimum of the Sahm indicator -- the difference between the 3-month trailing average of the…
This paper aims to compute the unemployment rate $u^*$ that is consistent with full employment in the United States. First, it argues that the most appropriate economic translation of the legal notion of full employment is social…
Immigration is often blamed for increasing unemployment among local workers. This sentiment is reflected in the rise of anti-immigration parties and policies in Western democracies. And in fact, numerous studies estimate that in the short…
This paper proposes a new, Beveridgean model of the Phillips curve. While the New Keynesian Phillips Curve is based on monopolistic pricing under price-adjustment costs, the Beveridgean Phillips curve is based on directed-search pricing…
P-hacking is prevalent in reality but absent from classical hypothesis testing theory. As a consequence, significant results are much more common than they are supposed to be when the null hypothesis is in fact true. In this paper, we build…
This paper develops a new model of business cycles. The model is economical in that it is solved with an aggregate demand-aggregate supply diagram, and the effects of shocks and policies are obtained by comparative statics. The model builds…
This paper develops a sufficient-statistic formula for the unemployment gap -- the difference between the actual unemployment rate and the efficient unemployment rate. While lowering unemployment puts more people into work, it forces firms…
This paper proposes a theory of pricing premised upon the assumptions that customers dislike unfair prices---those marked up steeply over cost---and that firms take these concerns into account when setting prices. Since they do not observe…
At the zero lower bound, the New Keynesian model predicts that output and inflation collapse to implausibly low levels, and that government spending and forward guidance have implausibly large effects. To resolve these anomalies, we…