Interest Rates and Unemployment: An Underwhelming Relation

Interest Rates and Unemployment: An Underwhelming Relation
Fix, Blair. (2023). Economics from the Top Down. 30 April. pp. 1-14. (Article - Magazine; English).

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https://economicsfromthetopdown.com/2023/04/30/interest-rates-and-unemployment-an-underwhelming-relation/, https://www.econstor.eu/handle/10419/270868

Abstract or Brief Description

For the last few months, I’ve been studying the distributional effects of interest-rate hikes. There’s been no shortage of surprising results.

In this post, I’ll discuss an effect that is surprising because it’s underwhelming. Many economist claim that when interest rates rise, unemployment will increase. The idea is that higher rates make businesses tighten their belts, leading to less hiring and greater unemployment.

Looking at the evidence, I find that this claim is not particularly compelling.

Language

English

Publication Type

Article - Magazine

Keywords

interest rate unemployment

Subject

BN International & Global
BN Macro
BN Policy
BN Region - North America
BN Comparative
BN Crisis
BN Growth

Depositing User

Jonathan Nitzan

Date Deposited

06 May 2023 22:54

Last Modified

11 May 2023 13:30

URL:

https://bnarchives.yorku.ca/id/eprint/781

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