No abstract

We investigate the size of the multiplier at the ZLB in a New keynesian model. It ranges from around -0.25 to +1.5, depending on the extent to which government spending is productive, substitutable or not for private consumption.

The SARS-CoV2 has now spread worldwide causing over four million deaths. Testing strategies are highly variable between countries and their impact on mortality is a major issue. Retrospective multicenter study with a prospective database on all inpatients throughout mainland France. Using fixed effects models, we exploit policy discontinuities at region borders in France to estimate the effect of testing on the case fatality rate. In France, testing policies are determined at a regional level, generating exogenous variation in testing rates between departments on each side of a region border. We compared all contiguous department pairs located on the opposite sides of a region border. The increase of one percentage point in the test rate is associated with a decrease of 0.0015 percentage point in the death rate, that is, for each additional 2000 tests, we could observe three fewer deaths. Our study suggests that COVID-19 population testing could have a significant impact on the mortality rate which should be considered in decision-making. As concern grows over the current second wave of COVID-19, our findings support the implementation of large-scale screening strategies in such epidemic contexts.

We shed light on the driving forces behind unemployment fluctuations and short-run changes in the informality rate on the Argentine labor market. Using Argentine survey data, we measure worker flows between formal employment, informal employment, unemployment and non-participation. We propose a methodology to correct for the discontinuity of Argentine survey data and that is able to compute consistent time series of quarterly ins and outs of informal work. Using variance decompositions and counterfactual exercises, we show that the ins and outs of informal employment are key drivers of labor market fluctuations. In particular, outflows from unemployment to informal employment account for 37% of fluctuations in the unemployment rate.In addition, our analysis suggests that informality is: (i) a flexible sector that is used in recessionary periods as a buffer against income losses and (ii) a stepping stone towards formal employment. The observed large changes in the informality rate are well explained by the change in job mobility between the formal and informal sectors as well as variations in hirings from unemployment and non-participation in the informal sector.