Unemployment Reduction Prowess under Bush versus Obama Years
Hrishikesh D. Vinod
Fordham University - Department of Economics
September 24, 2012
This paper attempts to compare the performance of presidents George W. Bush and Obama in the context of reduction of unemployment by comparing the Beveridge curve tradeoffs between vacancy and unemployment rates. We consider monthly data and measure the output of the economy as gross value of industrial production to define the output labor ratio. A new kind of production function is fitted showing how the friction scale elasticities, marginal elasticities and elasticities of substitution are quite different under Bush and Obama. The discrepancy is related to our not including capital input, interest rates, wage rates and similar important variables in our simplified model. However, we provide new isoquant maps with distinct appearances during Bush and Obama years providing mild support for Zingales (2012). Ultimately, there might be distinct employer evaluations of expected future profitability during the Bush and Obama periods. We implement this in a completely reproducible and transparent manner using the free R software.
Number of Pages in PDF File: 24
Keywords: Unemployment, Vacnacies, Bush, Obama, Elasticities, Friction, R software
JEL Classification: E2, E6, C4
Date posted: September 20, 2012 ; Last revised: September 25, 2012
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