There's nothing Sumner can believe the Fed can't do-it can quell any downturn, lick any Macro problem and can also leap tall buildings in a single bound, to boot. Yet the Fed disagrees with him.
http://diaryofarepublicanhater.blogspot.com/2013/05/the-fiscal-multiplier-sumner-vs-bernanke.html
He believes in the Fed's omnipotence more than the Fed does, itself. On another subject that Sumner never tries of telling us-that unemployment benefits significantly raise the unemployment rate-the Fed is also disagreeing. Ok, I should be careful and qualify this. This isn't necessarily the view of the Fed as a whole-the Fed would probably bow out of taking sides as an institution.
However, a major study from the San Francisco Fed shows that UI benefits don't drive up unemployment appreciably.
"Extended unemployment benefits Congress put in place at the outset of the Great Recession didn't discourage people from taking jobs, according to new research from the Federal Reserve Bank of San Francisco."
http://diaryofarepublicanhater.blogspot.com/2013/05/the-fiscal-multiplier-sumner-vs-bernanke.html
He believes in the Fed's omnipotence more than the Fed does, itself. On another subject that Sumner never tries of telling us-that unemployment benefits significantly raise the unemployment rate-the Fed is also disagreeing. Ok, I should be careful and qualify this. This isn't necessarily the view of the Fed as a whole-the Fed would probably bow out of taking sides as an institution.
However, a major study from the San Francisco Fed shows that UI benefits don't drive up unemployment appreciably.
"Extended unemployment benefits Congress put in place at the outset of the Great Recession didn't discourage people from taking jobs, according to new research from the Federal Reserve Bank of San Francisco."
"Princeton University economics professor Henry Farber and San Francisco Fed economist Rob Valletta found that extended benefits might have encouraged people to continue to look for work longer so that they could remain eligible for benefits. While the longer searches for jobs could have boosted the unemployment rate by four-tenths of a percentage point, the compensation didn't make the long-term jobless unwilling to work."
"It did not reduce the job finding rate," Farber told HuffPost. He added the benefits probably helped the economy, however, not to mention the individual people who otherwise might have had no income. "These are people who spend the money you give them."
The findings are similar to 2011 research by Jesse Rothstein of the University of California, Berkeley.
I've got to say that as someone who has been on unemployment during this recession, this is a case where science confirms my own empirical experience. The money I received certainly never encouraged me to want to stay on UI forever.
Sumner also often bemoans extending UI to 99 weeks, so as usual he doesn't draw any distinction between a boom and a slump regarding UI. Just like on austerity.
No comments:
Post a Comment