January 8, 2010

Richmond Fed's Economic Quarterly Examines Sectoral Employment and the Business Cycle

Richmond, Va.

Heterogeneity in Sectoral Employment and the Business Cycle by Nadezhda Malysheva and Pierre-Daniel G. Sarte

At the aggregate level, employment can be well explained by a relatively small number of factors. But when individual sectors are examined, things are quite different, according to findings by Richmond Fed economist Pierre-Daniel Sarte and research assistant Nadezhda Malysheva. Their results suggest that across all goods and services, common shocks explain on average only 31 percent of the variation in sectoral employment. "In other words, employment at the sectoral level is driven mostly by idiosyncratic shocks, rather than common shocks, to the different sectors," the authors write. 

You can find the full text of this article and others in the latest issue of Economic Quarterly at:
http://www.richmondfed.org/publications/research/economic_quarterly/.

Also in the Fall 2009 issue:

• Inventories and Optimal Monetary Policy by Thomas A. Lubik and Wing Leong Teo
• Dynamic Provisioning: A Countercyclical Tool for Loan Loss Reserves by Eliana Balla and Andrew McKenna
• The U.S. Establishment-Size Distribution: Secular Changes and Sectoral Decomposition by Samuel E. Henly and Juan M. Sánchez

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond’s Research Department--Publications at 800-322-0565.

The Federal Reserve Bank of Richmond is one of 12 District Reserve Banks that together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Richmond Fed serves the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

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