Knowledge that Transforms

This paper studies how monetary policy jointly affects asset prices and the real economy in the United States. I develop an estimator that uses high-frequency surprises as a proxy for the structural monetary policy shocks. This is achieved by integrating the surprises into a vector autoregressive model as an exogenous variable. I use current short-term rate surprises because these are least affected by an information effect. When allowing for time-varying model parameters, I find that compared to the response of output, the reaction of stock and house prices to monetary policy shocks was particularly low before the 2007–2009 financial crisis.

Using a representative online panel from the United States, we examine how individuals' macroeconomic expectations causally affect their personal economic prospects and their behavior. To exogenously vary respondents' expectations, we provide them with different professional forecasts about the likelihood of a recession. Respondents update their macroeconomic outlook in response to the forecasts, extrapolate to expectations about their personal economic circumstances, and adjust their consumption plans and stock purchases. Extrapolation to expectations about personal unemployment is driven by individuals with higher exposure to macroeconomic risk, consistent with macroeconomic models of imperfect information in which people are inattentive but understand how the economy works.

Job polarization refers to the shrinking share of employment in middle-skill, routine occupations experienced over the past 35 years. Jobless recoveries refers to the slow rebound in aggregate employment following recent recessions despite recoveries in aggregate output. We show how these two phenomena are related. First, essentially all employment loss in routine occupations occurs in economic downturns. Second, jobless recoveries in the aggregate can be accounted for by jobless recoveries in the routine occupations that are disappearing.

Previous article FreeJPE Turnaround Times, Previous Two YearsFull TextPDF Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreJPE Turnaround Times, Previous Two Years Outcome of 1st Round DecisionsMean Days to DecisionMedian Days to DecisionDecision Later than Six Months after Submission (as percentage of decisions within decision type)Desk Rejection49%1070%Reject with Reviews44%11810013%Revise7%16915938%Average time from original submission to acceptance (omitting time with author in revision) = 431 days View Table Image Previous article DetailsFiguresReferencesCited by Journal of Political Economy Volume 128, Number 7July 2020 Article DOIhttps://doi.org/10.1086/710174 Views: 288 © 2020 by The University of Chicago. All rights reserved. Crossref reports no articles citing this article.

Previous articleNext article FreeRecent RefereesFull TextPDF Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreJournal of Political Economy acknowledges the assistance of:Brant AbbottEliot AbramsRodrigo AdaoDavid AgrawalHeitor AlmeidaIsaiah AndrewsPeter ArcidiaconoDavid AtkinPierre AzoulayMichael BarnettMatthew BaronMarco BassettoChristiane BaumeisterChristian BayerDaniel BenjaminAlessandro BonattiStephane BonhommeTimo BoppartJordi BrandtsPeter BuisseretLuigi ButeraJuan CarrilloGabriel CarrollYuyu ChenLaurens CherchyeGabe Chodorow-ReichKaren ClayPhilip CookKerem CosarAnna CostelloNatalie CoxZoe CullenJakša CvitanićJoel DavidGiacomo De GiorgiFrancesca De NicolaGustavo De SouzaDaniela Del BocaBanu DemirEllora DerenoncourtManasi DeshpandeSebastian Di TellaAnna Dreber AlmenbergPierre DuboisPhilipp EisenhauerKfir EliazRobert EvansKirill EvdokimovHanming FangJames FeigenbaumShuaizhang FengJoseph FerrieTeresa FortAlexander FrankelGuillaume FrechetteChao FuAlberto GalassoDouglas GaleGeorge GeorgiadisAlbrecht GlitzBart GolsteynPhilip GravesDaniel GreenwaldYingni GuoMartin HackmannMarina HalacWilliam HanlonGlenn HarrisonJoop HartogOri HeffetzBart HobijnPär HolmbergRichard HornbeckDaniel HungermanErik HurstB. Kelsey JackTerrance JalbertPriit JeenasLoukas KarabarbounisFatih KarahanNeeraj KaushalNicolas KleinNarayana KocherlakotaNenad KosFrancis KramarzDavid LagakosKurt LavettiArthur LewbelAttila LindnerJason LindoChen LiuQingmin LiuKatrine LokenJens LudwigYao LuoMatthew MastenRaymond Mataloni, Jr.Filip MatejkaArnaud MaurelSteven MelloKonrad MenzelKarel MertensVirgiliu MidriganJosepa (Pepita) Miquel-FlorensaJoel MokyrJack MountjoyXiaosheng MuDaniel MurphyKyle MyersDavid NeumarkPaul NiehausPeter NormanRyan OpreaLuca OpromollaMarco OttavianiPablo OttonelloElias PapaioannouMathieu ParentiYoungmin ParkGert PeersmanHarry PeiKrishna PendakurSantiago PerezVincent PonsRichard PrisinzanoVincenzo QuadriniHeikki RantakariRonny RazinMichael RiordanWilliam RogersonDan-Olof RoothJesse RothsteinSutanuka RoyCian RuaneJuan Rubio-RamirezRaffaele SaggioTobias SalzMichael SattingerFlorian ScheuerJoshua SchwartzsteinCarmit SegalBradley ShapiroYotam Shem-TovItai SherClemens SialmHolger SiegAloysius SiowAndrzej SkrzypaczAlex SmolinMikkel SølvstenIsaac SorkinJörg SpenkuchFrancesco SquintaniJenna StearnsLudwig StraubDavid StrombergBruno StruloviciShinsuke TanakaJean TiroleGeorge TolleyTrevor TombeFabrice TourrePravin TrivediNick TsivanidisHelene TuronJohn Van ReenenFrederic VermeulenEwout VerriestSimon WeberMatthew WeinbergThomas WinberryAbigail WozniakKai Hao YangJunjian YiWes YinBasit ZafarYves ZenouOwen ZidarSeth ZimmermanUlf Zoelitz Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 128, Number 9September 2020 Article DOIhttps://doi.org/10.1086/711484 Views: 187 © 2020 by The University of Chicago. All rights reserved. Crossref reports no articles citing this article.

Previous article FreeJPE Turnaround Times, Previous Two YearsFull TextPDF Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreJPE Turnaround Times, Previous Two Years Outcome of 1st Round DecisionsMean Days to DecisionMedian Days to DecisionDecision Later than Six Months after Submission (as percentage of decisions within decision type)Desk Rejection49%1070%Reject with Reviews44%11810013%Revise7%16915938%Average time from original submission to acceptance (omitting time with author in revision) = 431 days View Table Image Previous article DetailsFiguresReferencesCited by Journal of Political Economy Volume 128, Number 8August 2020 Article DOIhttps://doi.org/10.1086/710656 Views: 314 © 2020 by The University of Chicago. All rights reserved. Crossref reports no articles citing this article.

Previous articleNext article FreeRecent RefereesPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreJournal of Political Economy acknowledges the assistance of:Eliot AbramsSumit AgarwalS. Nageeb AliPeter ArcidiaconoCarolina ArteagaJohn AskerSina AtesMiguel BallesterHeski Bar-IsaacBjoern BartlingMarianne BertrandMichael BestChristopher BlattmanAlessandro BonattiKevin BoudreauChristine BraunNick BuchholzKonrad BurchardiSydnee CaldwellJohn CampbellJuan CarrilloLaurent CavenaileChristopher ChambersGary CharnessJames ChoiJay ChoiSteve CicalaChristopher ClappJeffrey ClemensJohn CochraneAlain CohnKimberly CornaggiaVincent CrawfordMichael CunaGordon DahlMelissa DellDavid DemingWill DobbieMatthias DoepkeGregory DowAnna Dreber AlmenbergPiotr DworczakTore EllingsenMax FarrellShuaizhang FengJames FenskeDavid FiglioRaymond FismanJorge Luis GarcíaGreer GosnellDaniel HaanwinckelBruce HansenSamuel HartzmarkEmma HeikenstenTibor HeumannJames HinesRandi HjalmarssonRichard HornbeckErik HurstKoichiro ItoHanan JacobyLaurence JacquetTomas JagelkaPankaj JainCharles JonesPatrick KehoeMaxwell KelloggIgor KopylovDaniel KrahmerTheresa KuchlerGuido KuersteinerMichael KuhnPeter LandryJohn LeahyJustin LeungTim LeunigTeng LiNicola LimodioJo Thori LindAttila LindnerAriel ListoMeng LiuKatrine LokenElena LoutskinaCorinne LowEsfandiar MaasoumiMario MacisGlenn MagermanRobert MargoMarco MariottiAsier MariscalLeslie MarxXavier Mateos-PlanasNiko MatouschekThomas McInishDaniel McMillenHalvor MehlumKonrad MenzelGuy MichaelsStanley MilesJoel MokyrDavid MolitorJack MountjoyKaivan MunshiRebecca MyersonSuresh NaiduSusanne NeckermannNick NetzerTom NicholasJuan NicoliniSam NorrisHessel OosterbeekKevin O’RourkeRobert ÖstlingAmanda PallaisLubos PastorMaria PetrovaA. Mitchell PolinskyMaria PolyakovaThomas QuanDavid RapachDaniel RappoportAlex Rees-JonesA. ReynosoDavid RibarArthur RobsonDaniel RoggerMaya Rossin-SlaterAldo RustichiniLuca SalaAnya SamekFlorian ScheuerFrank SchilbachMolly SchnellCarsten SchroederMoritz SchularickDaniel SchunkHannes SchwandtMichael SchwertPetr SedlacekJesse ShapiroJoseph ShapiroSteven ShavellAndrew ShephardLan ShiRon SiegelOlmo SilvaLuis SimonErik SnowbergGary SolonStefanie StantchevaChristopher StantonJakub SteinerJoel StiebaleBruno StruloviciAlexander TorgovitskyRagnar TorvikBertil TungoddenChristopher UdryCan UrgunWinnie van DijkJohn Van ReenenHans VothReed WalkerChristopher WaltersHongcen WeiCatherine WeinbergerAlexander WhalleyEdward WolffJens WronaNathan YangJunjian YiJiro YoshidaH. YoungBasit ZafarAndy ZapechelnyukOwen ZidarSeth Zimmerman Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 128, Number 4April 2020 Article DOIhttps://doi.org/10.1086/709102 © 2020 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Previous articleNext article FreeRecent RefereesFull TextPDF Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreJournal of Political Economy acknowledges the assistance of:Eliot AbramsSumit AgarwalDavid AlbouyDiane AlexanderS. Nageeb AliTreb AllenPeter ArcidiaconoAshish AroraJohn AskerMiguel BallesterBjoern BartlingDaniel BenjaminMarianne BertrandChristopher BlattmanAlessandro BonattiStephane BonhommeLeah BoustanChristine BraunNick BuchholzKonrad BurchardiAntonio CabralesSydnee CaldwellAlexander CappelenPedro CarneiroJuan CarrilloLaurent CavenaileThomas ChaneyGary CharnessJay ChoiGian ClementiJohn CochraneAlain CohnJuan Carlos ConesaKimberly CornaggiaLucia CornoMarco CosconatiVincent CrawfordMichael CunaGordon DahlAluma DemboDavid DemingEllora DerenoncourtManasi DeshpandeMichael DicksteinWill DobbieMatthias DoepkeGregory DowJoseph DoyleWioletta DziudaItzik FadlonPablo FajgelbaumJames FenskeJames FeyrerRaymond FismanEric FrenchJoshua GansJorge Luis GarcíaAlexander GelberChristian GillitzerGreer GosnellDavid GreenJohn GrigsbyWilliam HanlonAnne HannuschBruce HansenBenjamin HebertOri HeffetzTibor HeumannMartin HolmRichard HornbeckErik HornungHanan JacobyTomas JagelkaPankaj JainBenjamin JohannsenCharles JonesSteven KaplanLouis KaplowMaxwell KelloggWilliam KerrBen KeysIgor KopylovTheresa KuchlerMichael KuhnLuc LaevenJoanna LaheyDarius LakdawallaTimothy LaytonJustin LeungTim LeunigRoss LevineJean-Paul L’HuillierAttila LindnerMatthew LindquistAriel ListoMeng LiuKatrine LokenErzo LuttmerSergey LychaginEsfandiar MaasoumiMario MacisBartosz MackowiakGlenn MagermanAsier MariscalAlisdair McKayDavid McLeanDaniel McMillenHalvor MehlumJoel MokyrDavid MolitorJohn MorrowJack MountjoyKaivan MunshiTom NicholasJuan NicoliniEric NielsenThomas NoeKevin O’RourkeHarry PeiJesse PerlaFelix PretisLouis PuttermanThomas QuanPablo QuerubinDaniel RappoportM. RehaviA. ReynosoRichard RobbArthur RobsonPauline RossiMaya Rossin-SlaterAriel RubinsteinAldo RustichiniNicholas RyanJohn SabelhausDaniel SacksMolly SchnellAndrew SchotterCarsten SchroederHannes SchwandtMariel SchwartzJesse ShapiroJoseph ShapiroAndrew ShephardRon SiegelOlmo SilvaLuis SimonKerry SmithLones SmithErik SnowbergGary SolonOlav SorensonFrancesco SquintaniJakub SteinerJoel StiebaleJan StoopJohannes StroebelMelissa ThomassonHaruka UchidaCan UrgunWinnie van DijkStijn Van NieuwerburghJohn Van ReenenAndrea WilsonDaniel WilsonLudger WoessmannEdward WolffJiro YoshidaPaolo ZacchiaBasit ZafarAndy ZapechelnyukLu ZhangOwen Zidar Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 128, Number 3March 2020 Article DOIhttps://doi.org/10.1086/708760 Views: 129 © 2020 by The University of Chicago. All rights reserved. Crossref reports no articles citing this article.

Previous article FreeJPE Turnaround Times, Previous Two YearsFull TextPDF Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMore JPE Turnaround Times, Previous Two Years Outcome of 1st Round DecisionsMean Days to DecisionMedian Days to DecisionDecision Later than Six Months after Submission (as percentage of decisions within decision type)Desk Rejection48%970%Reject with Reviews44%1179512%Revise8%17415336%Average time from original submission to acceptance (omitting time with author in revision) = 433 days View Table Image Previous article DetailsFiguresReferencesCited by Journal of Political Economy Volume 128, Number 3March 2020 Article DOIhttps://doi.org/10.1086/708456 Views: 154 © 2020 by The University of Chicago. All rights reserved. Crossref reports no articles citing this article.

Previous articleNext article FreeJPE Turnaround Times, Previous Two YearsFull TextPDF Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreJPE Turnaround Times, Previous Two Years Outcome of 1st Round DecisionsMean Days to DecisionMedian Days to DecisionDecision Later than Six Months after Submission (as percentage of decisions within decision type)Desk Rejection49%1070%Reject with Reviews43%11810114%Revise8%17516040%Average time from original submission to acceptance (omitting time with author in revision) = 433 days Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 128, Number 10October 2020 Article DOIhttps://doi.org/10.1086/711573 Views: 270 © 2020 by The University of Chicago. All rights reserved. Crossref reports no articles citing this article.