http://www.frbsf.org/publications/economics/papers/index.php FRBSF Working Paper Series http://www.frbsf.org/publications/economics/papers/2013/wp2013-09.pdf We study unemployment insurance benefit extensions across states to estimate their overall impact following the Great Recession compared with the extension during the much milder downturn in the early 2000s. We find a small but significant reduction in the unemployment exit rate and a small increase in the expected duration of unemployment arising from both sets of UI extensions, primarily due to a reduction in labor force exits rather than the job finding rate. 2013-04-11 00:00:00.0 FRBSF Working Paper Series Thurs, 11 April 2013 07:00:00 GMT Henry Farber, Robert Valletta http://www.frbsf.org/publications/economics/papers/2013/wp2013-09.pdf http://www.frbsf.org/publications/economics/papers/2013/wp2013-08.pdf We show that the existence of downward nominal wage rigidities bends the short-run wage Phillips curve. We introduce a model of monetary policy with downward nominal wage rigidities and show that both the slope and curvature of the Phillips curve depend on the level of inflation and the extent of downward nominal wage rigidities. 2013-03-29 00:00:00.0 FRBSF Working Paper Series Tues, 26 March 2013 07:00:00 GMT Mary Daly, Bart Hobijn http://www.frbsf.org/publications/economics/papers/2013/wp2013-08.pdf http://www.frbsf.org/publications/economics/papers/2013/wp2013-07.pdf We provide a tractable means to estimate an alternative Gaussian shadow-rate dynamic term structure model that enforces the zero lower bound on bond yields. We illustrate this model by estimating one-, two-, and three-factor shadow-rate models on a sample of positive and near-zero Japanese bond yields. We find that the level of the shadow rate is sensitive to model fit and specification, including the number of factors employed. 2013-03-26 00:00:00.0 FRBSF Working Paper Series Tues, 26 March 2013 07:00:00 GMT Jens Christensen, Glenn D. Rudebusch http://www.frbsf.org/publications/economics/papers/2013/wp2013-07.pdf http://www.frbsf.org/publications/economics/papers/2013/wp2013-06.pdf Regional inequality in China appears to be persistent and even growing in the last two decades. Some of the inequality in real wages could be attributed to differences in quality of labor, industry composition, labor supply elasticities, and geographical location of provinces. These factors explain about half of the cross-province real wage difference. Interestingly, inter-province redistribution and migration do not help offset regional inequality during our sample period. 2013-03-25 00:00:00.0 FRBSF Working Paper Series Mon, 25 March 2013 07:00:00 GMT Christopher Candelaria, Mary Daly, Galina Hale http://www.frbsf.org/publications/economics/papers/2013/wp2013-06.pdf http://www.frbsf.org/publications/economics/papers/2013/wp2013-05.pdf Conventional analyses of cyclical fluctuations in the labor market ascribe a minor role to the labor force participation margin. In contrast, a flows-based decomposition of the variation in labor market stocks reveals that transitions at the participation margin account for around one-third of the cyclical variation in the unemployment rate. 2013-02-01 00:00:00.0 FRBSF Working Paper Series Tue, 18 March 2013 07:00:00 GMT Michael Elsby, Bart Hobijn, Ayşegűl Şahin http://www.frbsf.org/publications/economics/papers/2013/wp2013-05.pdf http://www.frbsf.org/publications/economics/papers/2013/wp2013-04.pdf We examine how the confluence of competition and upstream innovation influences downstream firms’ profit-maximizing strategies. We focus on personal computers and introduce two novel data sets that describe prices and sales in the industry. We find that a vintage-capital model combining competition with rapid innovation is well able to explain the observed paths of prices, as well as sales and consumer income, over a typical PC’s product cycle. 2013-02-01 00:00:00.0 FRBSF Working Paper Series Thu, 7 March 2013 07:00:00 GMT Adam Copeland, Adam Shapiro http://www.frbsf.org/publications/economics/papers/2013/wp2013-04.pdf http://www.frbsf.org/publications/economics/papers/2013/wp2013-03.pdf We investigate the behavior of the equilibrium price-rent ratio for housing in a standard asset pricing model, allowing for time-varying risk aversion and time-varying persistence and volatility in the stochastic process for rent growth. The model can approximate the volatility of the price-rent ratio in the data if near-rational agents continually update their estimates for the mean, persistence, and volatility of fundamental rent growth using only recent data or if agents employ a simple moving-average forecast rule that places a large weight on the most recent observation. 2013-02-01 00:00:00.0 FRBSF Working Paper Series Fri, 8 February 2013 07:00:00 GMT Paolo Gelain, Kevin J. Lansing http://www.frbsf.org/publications/economics/papers/2013/wp2013-03.pdf http://www.frbsf.org/publications/economics/papers/2013/wp2013-02.pdf This paper proposes a simple method to structurally estimate a model over a period of time containing a regime shift. It then evaluates to what degree it is relevant to explicitly acknowledge the break in the estimation procedure. We show that ignoring the break in the estimation leads to spurious estimates of model parameters. Accounting for the regime change suggests that monetary policy reacted strongly to exchange rate movements in the first regime, and mostly to inflation in the second. 2012-10-01 00:00:00.0 FRBSF Working Paper Series Fri, 18 January 2013 07:00:00 GMT Vasco Curdia, Daria Finocchiaro http://www.frbsf.org/publications/economics/papers/2013/wp2013-02.pdf