Unequal Unemployment Effects of COVID-19 and Monetary Policy across U.S. States

No 2102, Working Papers from Florida International University, Department of Economics

Abstract: This paper shows that daily Google trends can be used as an alternative to conventional U.S. data (with alternative frequencies) on unemployment, interest rates, inflation and coronavirus disease 2019 (COVID-19). This information is used to investigate the effects of COVID-19 and the corresponding monetary policy on the U.S. unemployment, both nationally and across U.S. states, by using a structural vector autoregression model. Historical decomposition analyses show that the U.S. unemployment is mostly explained by COVID-19, whereas the contribution of monetary policy is almost none. An investigation based on the U.S. states further suggests that COVID-19 and the corresponding monetary policy conducted based on nationwide economic developments have resulted in unequal changes in state-level unemployment rates, suggesting evidence for distributive effects of national monetary policy.

Keywords: COVID-19; Coronavirus; Google Trends; Monetary Policy (search for similar items in EconPapers)
JEL-codes: F66 I10 J63 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2021-01
New Economics Papers: this item is included in nep-cba and nep-mon
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https://economics.fiu.edu/research/pdfs/2021_working_papers/2102.pdf First version, 2021 (application/pdf)

Related works:
Journal Article: Unequal unemployment effects of COVID-19 and monetary policy across U.S. States (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:2102

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