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Uncertainties, Employment and the Zero Lower Bound

Author

Listed:
  • Qing Nie

    (Department of Economics, Grinnell College, USA)

  • Xin L. Brown

    (School of Business and Leadership, Our Lady of the Lake University, USA)

  • Baohui Liu

    (School of Economics, Shandong University of Finance and Economics, China)

  • Maruf Morshed

    (Department of Economics, Illinois State University, USA)

Abstract

The purpose of this paper is to study the response of aggregate and sectoral employment in the United States to shocks and uncertainties in the oil and macro markets. To estimate the actual dataset, we employ a VAR model with 12 variables using U.S. data during 1986Q1-2021Q4. With alternative oil and macroeconomic uncertainties and different monetary authorities, we find that employment is significantly affected by both types of uncertainty when zero lower bound (ZLB) binds. Total employment and oil-related industries employment show a significant increase in the presence of the ZLB and the propagation of uncertainty shock from the oil market. These findings highlight the empirical relevance of oil prices and macroeconomic uncertainty on U.S. labor market dynamics.

Suggested Citation

  • Qing Nie & Xin L. Brown & Baohui Liu & Maruf Morshed, 2024. "Uncertainties, Employment and the Zero Lower Bound," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 305-316, July.
    • Handle: RePEc:eco:journ2:2024-04-27
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    More about this item

    Keywords

    Employment; Oil Uncertainty; Aggregate Uncertainty; The Zero Lower Bound;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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