Shifts in the Interest Rate Sensitivity of Employment across U.S. Industries--论文代写范文精选

捕捉特定于行业的利益货币政策,包括一个额外的变量，总就业变量的影响排除特定行业。其他三个变量保持不变。在这个扩展结构,假设货币政策影响就业，然后分析了一组全面的行业就业变量。下面的essay代写范文进行详述。

Shifts in the Interest Rate Sensitivity of Employment across U.S. Industries 
Shifts in the interest sensitivity of employment could be due to a variety of factors. Changing behavior of policymakers, households, and firms could explain the observed shift. Similarly, structural changes resulting from new technologies, increased globalization, and financial regulations could alter the economy’s responsiveness to monetary policy actions. The analysis considers employment responses at the industry level to evaluate whether changes in overall interest sensitivity are due to shifts in a few industries or widespread. Some industries, such as durable goods manufacturing and construction, are more interest sensitive than others, such as health-care services and education. Accounting for differences in interest sensitivity across industries—and uncovering possible shifts in interest sensitivity over time for these industries—can provide useful insights into the overall change in the interest rate channel of monetary policy.

A statistical model of the industry-specific interest rate channel of monetary policy 
To capture the industry-specific interest channel of monetary policy, the statistical model is expanded to include one additional variable: employment in an individual industry. The aggregate employment variable is adjusted to exclude employment in the given industry, and therefore represents employment in all other industries. The other three variables remain the same. In this expanded structure, the model estimates the relationship between the federal funds rate and employment in an individual industry. The timing assumption that monetary policy affects employment with a one-month lag remains the same. The analysis incorporates a comprehensive set of industry-level employment variables. 

The initial stage of analysis examines four broad industry categories in the private sector. The first two categories encompass industries traditionally considered the most interest sensitive: durable goods manufacturing and construction. The third category encompasses nondurable goods manufacturing, and the fourth category represents employment in the private service-providing industries. The second stage of the analysis examines interest sensitivity within 18 different industries that make up the entire economy. Changes in the interest rate channel of monetary policy across industries Estimates of employment’s interest sensitivity in the pre-1985 period closely match the traditional story of the interest rate channel of monetary policy. The largest employment response to an unexpected 25 basis point cut in the federal funds rate occurred in the durable goods manufacturing and construction categories (Chart 3, Panel A). 

Twenty-four months after the cut, the cumulative employment increase was 0.25 percent for construction and durable goods manufacturing, a greater response than that of aggregate employment. The two other categories, nondurable goods manufacturing and private service-providing industries, exhibited less interest sensitivity than the overall economy in the pre-1985 period. The employment responses of these two categories were similar: a gradual increase in employment cumulating in an increase of 0.12 percent two years after the cut in the federal funds rate (Chart 3, Panel B). 

In broad terms, these estimates match the typical view of the interest rate channel that durable goods manufacturing and construction are the most interestsensitive sectors and nondurable goods manufacturing and private service-providing industries are less interest sensitive, with the overall economy somewhere in between. In the post-1984 period, interest sensitivity declined across all categories (Chart 4). Durable goods manufacturing experienced the largest downward shift in employment response, but the responses of nondurable goods manufacturing and private service-providing industries also decreased notably. 

In the nondurable goods manufacturing category, the cumulative employment response two years after the cut in the federal funds rate was a net decline of about 0.19 percent, as opposed to a 0.12 percent positive response in the pre-1985 period. In the construction category, the employment response in the post-1984 period was delayed much longer than in the pre-1985 period. The employment responses in all categories were statistically insignificant in the post- 1984 period. A similar decrease in the interest sensitivity of employment is found across a broad range of industries (Table 1). 

Industries with the greatest interest sensitivity in the pre-1985 period, such as construction and durable goods manufacturing, experienced the largest decreases in responsiveness over time. But many industries in the service sector, such as retail trade and trade, transportation, and utilities, experienced similar declines. The industry with the largest overall decline in interest sensitivity was information services, with a net decline of 0.5 percentage point 18 months after an unexpected 25 basis point cut in the federal funds rate in the post-1984 period compared with the pre-1985 period. The only industries with a modest increase in interest sensitivity were education and health, other services, and government, but the estimated employment responses for these industries were insignificant in the post- 1984 period. In summary, nearly all measures of employment’s interest sensitivity at the aggregate and industry level declined in the post-1984 period. This evidence, however, does not identify the source of the change in the interest rate channel.

Decomposing the Decline in Employment’s Interest Rate Sensitivity 
The decline in the interest rate sensitivity of employment may be a result of changes at different points in the interest rate channel of the monetary transmission mechanism (Figure 1). First, the response of monetary policy to current economic conditions such as inflation and employment may have changed over time. Second, changes in the financial sector may have altered the transmission of monetary policy changes to broader market interest rates and ultimately to the overall economy. And third, structural changes across the economy may have changed the way industries and the aggregate economy interact. These relationships are studied to analyze interactions between the federal funds rate and the 10-year Treasury yield, industry employment, and aggregate employment.

The contribution of monetary policy shifts to changes in interest sensitivity 
While the Federal Reserve conducts monetary policy to “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates,” its methods have evolved, most notably in the late 1970s and early 1980s. On October 6, 1979, then-Chairman Paul Volcker led a change in the Fed’s approach to begin targeting monetary aggregates—that is, the Fed began targeting the quantity of reserves rather than interest rates. By controlling the banking system’s reserves, the Fed limited the supply of money to curb inflation. Although the Fed reverted to targeting the federal funds rate in 1982, the early 1980s marked the beginning of a new era in which monetary policy became more responsive to inflation. Did the change in the conduct of monetary policy contribute to the estimated decline in the interest sensitivity of employment? To address this question, a counterfactual exercise is performed with an alternative model designed to capture the key features of the monetary transmission mechanism. An alternative model is needed because the VAR model used in the prior sections is not designed to analyze changes in the conduct of monetary policy over time.（essay代写)

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