Unequal unemployment effects of COVID-19 and monetary policy across U.S. States
Hakan Yilmazkuday
Journal of Behavioral Economics for Policy, 2020, vol. 4, issue S3, 45-53
Abstract:
This paper shows that daily Google trends can be used as an alternative to conventional U.S. data (with alternative frequencies) on unemployment, interest rates, inflation and coronavirus disease 2019 (COVID-19). This information is used to investigate the effects of COVID-19 and the corresponding monetary policy on the U.S. unemployment, both nationally and across U.S. states, by using a structural vector autoregression model. Historical decomposition analyses show that the U.S. unemployment is mostly explained by COVID-19, whereas the contribution of monetary policy is almost none. An investigation based on the U.S. states further suggests that COVID-19 and the corresponding monetary policy conducted based on nationwide economic developments have resulted in unequal changes in state-level unemployment rates, suggesting evidence for distributive effects of national monetary policy.
Keywords: COVID-19; Coronavirus; Google Trends; Monetary Policy (search for similar items in EconPapers)
JEL-codes: F66 I10 J63 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)
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Persistent link: https://EconPapers.repec.org/RePEc:beh:jbepv1:v:4:y:2020:i:s3:p:45-53
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