Anna Belianska
Uncertainty and the labor market

High levels of uncertainty are often associated with low economic activity and recessions. Transmission mechanisms of uncertainty have become a newly blossoming area of research. In this paper I focus on the channel of the labor market. First, I document empirically that uncertainty shocks lead to contractions in output, private investment and in particular employment of both skilled and unskilled labor in a Structural VAR for the US. I then proceed to build a DSGE framework in which I assume that skilled and unskilled labor have different roles in production. I investigate the effects of uncertainty shocks on skilled and unskilled labor in the context of capital-skill complementarity and search and matching frictions on the labor market to illustrate a new transmission mechanism through which uncertainty can produce macroeconomic effects.

Etienne Vaccaro-Grange
Quantitative easing and the term premium as a monetary policy instrument

This paper analyses the effects of Quantitative Easing on inflation and economic activity through the term premium channel in the Euro Area. I extract a term premium from an arbitrage-free discrete-time shadow rate term structure model and plug it into a monthly Bayesian Structural VAR including inflation and a proxy for economic growth. A QE shock is then identified using developed Narrative sign restrictions. Quite unexpectedly, I find that the impact of QE through the term premium tends to raise output but to lower prices, shedding light on a potential cost-channel in the transmission mechanism.