Press Releases

Economic Quarterly

May 8, 2017

Richmond Fed’s Economic Quarterly Expands on the Non-Employment Index

Richmond, Va.

In the Richmond Fed’s new Economic Quarterly, economists Andreas Hornstein and Marianna Kudlyak expand on the non-employment index they first proposed in 2014 along with Fabian Lange. They show how it fits into recent extensions of the matching function (a standard macroeconomic approach to model labor markets with frictions), how it affects estimates of the extent of labor market frictions, and how these frictions have changed in the Great Recession.

Hornstein, a senior advisor at the Richmond Fed, and Kudlyak, a senior economist at the San Francisco Fed who formerly worked in Richmond, examine factors such as heterogeneity among the non-employed and expanded coverage of the search pools, and conclude that the efficiency of the U.S. labor market has not declined as much as would be suggested by standard measures of unemployment.

This article and others in the latest issue of Economic Quarterly are available on our website.

Also in this issue:

  • Price Dispersion When Stores Sell Multiple Goods by Nicholas Trachter
  • Monetary Incentives and Mortgage Renegotiation Outcomes by Nika Lazaryan and Urvi Neelakantan

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. More information is available at (800) 322-0565 or online.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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