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Using bilateral data on migration across US metro areas, we find strong evidence that increasing house price and income inequality has reduced long distance migration, the type most linked to jobs. For those migrating uphill, from a less to a more prosperous location, lower mobility is driven by increasing house price inequlity, as the disincentives from higher house prices dominate the incentives from higher earnings. By contrast, increasing income inequality drives the fall in downhill migration as the disincentives from lower earnings dominate the incentives from lower house prices. The model underlines the plight of those trapped in decaying metro areas—those “left behind”.

Emigration and immigration --- History. --- Macroeconomics --- Real Estate --- Demography --- Emigration and Immigration --- Geographic Labor Mobility --- Immigrant Workers --- Mobility, Unemployment, and Vacancies: Public Policy --- Personal Income, Wealth, and Their Distributions --- Housing Supply and Markets --- International Migration --- Aggregate Factor Income Distribution --- Demographic Economics: General --- Property & real estate --- Migration, immigration & emigration --- Population & demography --- Housing prices --- Personal income --- Migration --- Income inequality --- Population and demographics --- Prices --- National accounts --- Housing --- Income --- Income distribution --- Population --- United States

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The rise of global supply chains has had profound effects on individual economies and the global trading system, thereby complicating standard macroeconomic analyses. For many of the new and challenging questions brought about by this phenomenon, such as its impact on the global business cycle and measurements of competitiveness, the answer largely depends on one specific aspect of global value chains: how easily they can re-configure in response to changes in prices. We propose a parsimonious, generalized specification to test the degree of global-supply-chain flexibility. Our estimates show that, in the short run, the production structure is highly inflexible, and that this rigidity has, if anything, risen over time as supply chains have deepened over time. This finding is robust to alternative price measures, including those that account for the U.S. dollar’s outsized role in trade through invoicing. While in the long run all estimated elasticities rise, supply chains remain somewhat inflexible. Our results have implications for analyses of cross-country business-cycle dynamics, the propagation of sectoral shocks, and the measurement of international competitiveness.

Globalization --- Economic aspects. --- Exports and Imports --- Foreign Exchange --- Trade: General --- Globalization: General --- Currency --- Foreign exchange --- International economics --- Exports --- Real effective exchange rates --- Exchange rates --- Imports --- Global value chains --- International trade --- United States

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Estimates of output gaps continue to play a key role in assessments of the stance of business cycles. This paper uses three approaches to examine the historical record of output gap measurements and their use in surveillance within the IMF. Firstly, the historical record of global output gap estimates shows a firm negative skew, in line with previous regional studies, as well as frequent historical revisions to output gap estimates. Secondly, when looking at the co-movement of output gap estimates and realized measures of slack, a positive, but limited, association is found between the two. Thirdly, text analysis techniques are deployed to assess how estimates of output gaps are used in Fund surveillance. The results reveal no strong bearing of output gap estimates on the coverage of the concept or direction of policy advice. The results suggest the need for continued caution in relying on output gaps for real-time policymaking and policy assessment.

New Zealand --- Business and Economics --- Exports and Imports --- Inflation --- Macroeconomics --- Production and Operations Management --- Price Level --- Deflation --- Business Fluctuations --- Cycles --- Money and Interest Rates: Forecasting and Simulation --- Monetary Policy --- Fiscal Policy --- Macroeconomics: Production --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Current Account Adjustment --- Short-term Capital Movements --- Economic growth --- International economics --- Output gap --- Potential output --- Business cycles --- Current account balance --- Production --- Prices --- Balance of payments --- Economic theory

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Measuring Competitiveness in a World of Global Value Chains.

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This paper dives into the Fund’s historical coverage of cross-border spillovers in its surveillance. We use a state-of-the-art deep learning model to analyze the discussion of spillovers in all IMF Article IV staff reports between 2010 and 2019. We find that overall, while the discussion of spillovers decreased over time, it was pronounced in the staff reports of some systemically important economies and during periods of global spillover events. Spillover discussions were more prominent in staff reports covering advanced and emerging market economies, possibly reflecting their role as sources of global spillovers. The coverage of spillovers was higher in the context of the real, financial, and external sectors. Also, countries with larger economies, higher trade and capital account openess and lower inflation are more likely to discuss spillovers in their Article IV staff reports.

Macroeconomics --- Economics: General --- International Economics --- Econometrics --- Intelligence (AI) & Semantics --- Exports and Imports --- Inflation --- Foreign Exchange --- Informal Economy --- Underground Econom --- Externalities --- Discrete Regression and Qualitative Choice Models --- Discrete Regressors --- Proportions --- Technological Change: Choices and Consequences --- Diffusion Processes --- Current Account Adjustment --- Short-term Capital Movements --- Price Level --- Deflation --- Economic & financial crises & disasters --- Economics of specific sectors --- Econometrics & economic statistics --- Machine learning --- International economics --- Financial crises --- Economic sectors --- Spillovers --- Financial sector policy and analysis --- Probit models --- Econometric analysis --- Technology --- Capital account --- Balance of payments --- Prices --- Currency crises --- Informal sector --- Economics --- International finance --- Econometric models --- China, People's Republic of