This Economic Letter summarizes the papers presented at a conference on "Labor Markets and the Macroeconomy" held at the Federal Reserve Bank of San Francisco on March 3 and 4, 2006.

We develop a model with labor-market matching frictions that is subject to a range of shocks, including shocks to matching efficiency and bargaining power, and use the model to examine how monetary policy should respond to such shocks. We show that optimal monetary policy is highly efficient at...

We provide a set of comparable estimates for the rates of inflow to and outflow from unemployment for 14 OECD economies using publicly available data. We then devise a method to decompose changes in unemployment into contributions accounted for by changes in inflow and outflow rates for cases...

Using data from the Current Population Survey, we examine recent trends in the relative economic status of black men. Our findings point to gains in the relative wages of black men (compared to whites) during the 1990s, especially among younger workers. In 1989, the average black male worker...

To understand Fed policy at this point, you have to look at this whole picture. We have good GDP growth, but a yawning shortfall of employment and output from potential levels. ; Presentation to the Chicago Booth Graduate School of Business Alumni Club of San Francisco, San Francisco, Ca,...

Conventional analyses of cyclical fluctuations in the labor market ascribe a minor role to the labor force participation margin. In contrast, a flows-based decomposition of the variation in labor market stocks reveals that transitions at the participation margin account for around one-third of...

The Beveridge curve depicts the empirical relationship between job vacancies and unemployment, which in turn reflects the underlying efficiency of the job matching process. Previous analyses of the Beveridge curve suggested deterioration in match efficiency during the 1970s and early 1980s,...

We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the effects of policymakers' misperceptions of the natural rate of unemployment during the late 1960s...