The Dynamic Effects of U.S. Monetary Policy on State Unemployment
Dimitris Korobilis and
Working Paper series from Rimini Centre for Economic Analysis
This paper studies the transmission of monetary shocks to state unemployment rates, within a novel structural factor-augmented VAR framework with a timevarying propagation mechanism. We find evidence of large heterogeneity over time in the responses of state unemployment rates to monetary policy shocks, which do not necessarily comply with the response of the national unemployment rate. We also find evidence of heterogeneity over the spatial dimension, although geographical proximity seems to play an important role in the transmission of monetary shocks.
Keywords: regional unemployment; structural VAR; factor model; monetary policy (search for similar items in EconPapers)
JEL-codes: R15 C11 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-geo, nep-mac and nep-mon
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Working Paper: The dynamic effects of U.S. monetary policy on state unemployment (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:12_11
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