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Oil Price Shocks and Labor Market Fluctuations

Javier Ordóñez, Hector Sala and José I. Silva

Year: 2011
Volume: Volume 32
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol32-No3-4
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Abstract:
We examine the impact of real oil price shocks on labor market flows in the U.S. We first use smooth transition regression (STAR) models to investigate to what extent oil prices can be considered as a driving force of labor market fluctuations. Then we develop and calibrate a modified version of Pissarides' (2000) model with energy costs, which we simulate in response to shocks mimicking the behavior of the actual oil price shocks. We find that (i) these shocks are an important driving force of job market flows; (ii) the job finding probability is the main transmission mechanism of such shocks; and (iii) they bring a new amplification mechanism for the volatility of the labor market, and should thus be seen as complementary of labor productivity shocks. Overall we conclude that shocks in oil prices cannot be neglected in explaining cyclical labor adjustments in the U.S.



Electrification and Socio-Economic Empowerment of Women in India

Ashish Kumar Sedai, Rabindra Nepal, and Tooraj Jamasb

Year: 2022
Volume: Volume 43
Number: Number 2
DOI: 10.5547/01956574.43.2.ased
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Abstract:
This study moves beyond the consensus of counting electrified households as a measure of progress in gender energy parity. Using the India Human Development Survey, we examine the effect of reliability of electrification on empowerment of women in terms of economic autonomy, agency, mobility and decision-making abilities, underscoring the labor market and respite effects of service reliability. We develop a comprehensive set of empowerment indices using principal component analysis and assess the causal effects of power outages on the indices with instrumental variable regressions while controlling for individual, household, district and caste characteristics. Results show that reliability of electricity has significant positive effects on all empowerment indices and improves women’s labor market outcomes, however, the effects differ at the margin of deficiency, location, living standards and education. The study recommends policy focus on electrification from a gendered lens for cost-effective solutions.



Oil Price Shocks and Current Account Imbalances within a Currency Union

Timo Baas and Ansgar Belke

Year: 2023
Volume: Volume 44
Number: Number 4
DOI: 10.5547/01956574.44.4.tbaa
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Abstract:
For over two decades, current account imbalances have been an essential issue in the global policy debate as they threaten the world economy's stability. More recently, the government debt crisis of the European Union shows that internal current account imbalances of a currency union may also add to these risks. Moreover, oil price fluctuations and a contracting monetary policy that reacts to oil prices, previously discussed to affect the current account, may threaten the currency union by increasing internal imbalances. Therefore, this paper analyzes the oil price shock's impact on current account imbalances of a currency union with asymmetric labor market institutions. In this context, we show that oil price shocks can have a long-lasting effect on internal balances that the common monetary policy authority can reduce by choosing a core inflation target. Targeting core inflation, however, comes at the cost of lower production and higher unemployment. We show that these costs can be significantly reduced by increasing labor market flexibility.





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