Aggregate Demand, Idle Time, and Unemployment: Code and Data

This repository contains the code and data accompanying the paper "Aggregate Demand, Idle Time, and Unemployment", written by Pascal Michaillat and Emmanuel Saez, and published in the Quarterly Journal of Economics in May 2015.

Paper webpage

The paper and its online appendix are available at https://pascalmichaillat.org/3/.

Data

The data are stored in two Excel workbooks:

• data.xlsx contains the raw data used in the paper, along with descriptions of the data sources. This workbook contains five worksheets:
  • unused capacity contains data on the rates of idleness and unemployment in the United States.
  • occupations contains data on the number of workers in recruiting and purchasing occupations in the United States.
  • long-term relationships contains data on the prevalence of long-term customer and employment relationships in 11 countries, including the United States.
  • quarterly data contains quarterly macroeconomic data for the United States (capacity utilization rate in manufacturing from the Survey of Plant Capacity, employment level, real output, operating rate in non-manufacturing sectors from the Institute for Supply Management).
  • monthly data contains monthly macroeconomic data for the United States (unemployment level, vacancy index, unemployment rate, employment level in manufacturing).
• cyclical_components.xlsx contains the cyclical components of product market tightness, labor market tightness, output, and employment for the United States. The cyclical components are computed by the program construct_cyclical_components.m from the raw data in data.xlsx. Our exploration of the sources of unemployment fluctuations in the United States relies on these cyclical components. This workbook contains two worksheets:
  • 1973–2013 contains the cyclical components of labor market tightness, output, and employment. It also contains the proxy for the cyclical component of product market tightness constructed using the capacity utilization rate in the manufacturing sector measured by the Census Bureau from the Survey of Plant Capacity. These four cyclical components are available at quarterly frequency from 1973:Q4 to 2013:Q2.
  • 1999–2013 contains the cyclical components of labor market tightness, output, and employment. It also contains the proxy for the cyclical component of product market tightness constructed using the capacity utilization rate in the manufacturing sector measured by the Census Bureau from the Survey of Plant Capacity. Last, it contains the proxy for the cyclical component of product market tightness constructed using the operating rate in non-manufacturing sectors measured by the Institute for Supply Management. These five cyclical components are available at quarterly frequency from 1999:Q4 to 2013:Q2.

Code

The results are produced with MATLAB code.

• The script construct_cyclical_components.m uses the raw data in data.xlsx to produce the cyclical components of product market tightness, labor market tightness, output, and employment. The resulting cyclical components are stored in cyclical_components.xlsx.
• The script plot_figures.m uses the data in data.xlsx and cyclical_components.xlsx to produce several figures from the article and online appendix:
  • Figures II
  • Figure VIII
  • Figure IX
  • Figure X
  • Figure A2
  • Figure A3
• The function quarter.m transforms a monthly time series into a quarterly time series.

Software

The results were obtained on a Mac running OS X Yosemite with MATLAB R2014b.

License

The content of this repository is licensed under the terms of the MIT License.