Roundup Of Key Research Papers At Jackson Hole

Tyler Durden's picture

With all eyes and ears firmly focused Janet Yellen's opening oratory this morning (due at 10ET), the contents of the rest of the conference appear to have been forgotten (and yet in the past have been among the most crucial to comprehend central banks' actions after the fact - forward guidance and QE for 2). As Bloomberg BusinessWeek reports, robots don’t steal jobs, the U.S. labor market is less flexible than it was, and workers haven’t suffered unprecedented periods out of work (and rehiring odds are the same as always), are among the conclusions of key papers being presented at the symposium, along with (unsurprisingly) findings that policymakers would benefit from a better understanding of labor market dynamics. The following is a brief review of their contents...

Robots and computers don’t steal as many jobs as some believe, and automation actually benefits many workers, Massachusetts Institute of Technology Professor David Autor said in his paper.

A key reason humans aren’t obsolete yet is that simple tasks such as visually identifying a chair, which any child can do, aren’t so easy for engineers to teach to computers, Autor said.


Journalists and expert commentators overstate the extent of machine substitution for human labor and ignore the strong complementarities that increase productivity, raise earnings, and augment demand for skilled labor,” he wrote. “Challenges to substituting machines for workers in tasks requiring flexibility, judgment, and common sense remain immense.”

The U.S. labor market became less fluid in recent decades partly because of an aging workforce, a shift to older businesses, and the spread of occupational licensing and certification, economists Steven J. Davis and John Haltiwanger wrote in their paper.

The economists define labor market fluidity as “flows of jobs and workers across employers.” The paper found the U.S. “underwent a large, broad-based decline in the pace of labor market flows in recent decades.”

“An aging workforce is a factor behind the slowdown of worker reallocation,” the paper said.

Other factors they found included the “information revolution in hiring practices”; minimum wage laws; and “job lock” associated with employer-related health insurance.

US workers in the aftermath of the 2007-2009 recession haven’t experienced unprecedentedly long bouts of non-employment, according to a paper by economists Jae Song and Till von Wachter.

Their findings “suggest that the potential for hysteresis in the aftermath of the Great Recession is moderate,” the paper said.


Hysteresis posits that people out of work for too long have a harder time finding work, leading to a persistent decline in the employment-to-population rate.


In contrast to long-term unemployment, the extent of long-term non-employment “was comparable to that in previous recessions,” the paper says, finding that non-employment spells lasting more than two years “exhibited moderate cyclical movements” also similar across downturns.

Policy makers would benefit from a better understanding of labor markets, economist Giuseppe Bertola argued in a paper that weighed the impact of rules making those markets rigid or flexible.

Rules that protect workers from job losses and provide more generous unemployment benefits can soften and smooth shocks to the economy, said Bertola.


More rigid policies have a greater appeal to policy makers “after a crisis that casts doubt on the efficacy of financial markets and shows that monetary and other macro policies cannot always prevent deep recessions”

Rules that make it easier for companies to fire workers can speed up how an economy adjusts after a crisis and are particularly useful when “sector reallocation” is needed “but it would be wishful to suppose that it can quickly and painlessly restore equilibrium”

Pros and cons of market rigidities depend on circumstances, and labor policies should adapt to specific conditions

“Policy makers should be ready to react appropriately to cyclical and structural developments in labor as well as monetary, financial and goods markets”

“Labor market rigidities may yet become fashionable in the aftermath of a crisis where they were useful”

  *  *

So, there you have it - in full Obi Wan Kenobi 'this is not the reality you are looking for' style - the smartest people in the room want you to believe that robotification does not mean minimum wage hikes are impossible (just don't tell McDonalds) and that workers really haven't suffered that much (compared to ther recessions) - despite this being the worst recovery ever.

Finally, for those looking for today's full agenda, here it is: 

Source: Bloomberg and Bloomberg BusinessWeek

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Raoul_Luke's picture

How's this for a "better understanding of labor market dynamics" - entrepreneurs do not create jobs in a "you didn't build that" economic environment.  This isn't rocket science...

DeadFred's picture

When everyone thinks she's going to go ultra dovish that's a good time to bet the opposite. The BIS has spoken and the bull run must come to a halt and this would be a good time for it.

101 years and counting's picture

there is no way she pops this bubble.  look at that fat bitch.  all she knows is excess.  

SMG's picture

This is a great picture (picture in article).   Look at how Yellen is ignoring the protestor, just like she ignores reality.



BurningFuld's picture

Hummm I don't see Bank Theft on their list of topics.

replaceme's picture

OK, I'm glad I checked that out - she's now my wallpaper...

Squid Viscous's picture

whoever is throwing up 130,000 share bids on the SPY pre-market aint gonna let that happen... at least not today

fonzannoon's picture

we got down 17k for teh 4th of July we better fucking get SPY 2k for Yellen today. We deserve it for being exceptional.

venturen's picture

Thinking they will stop is like a herion dopper stopping...ain't happening till we are full on Detroit! 

Kreditanstalt's picture

This is insane...before they place their bets (because "investing" is dead), the entirety of many peoples' futures, the security of their jobs (if they have any) and the careers of loads of "investors" all hinge on the report of the Counterfeiter-in-Chief.

JustObserving's picture

Any papers on how every US economic statistic is fake now? No.  Didn't think so. 

All papers will be celebrating the fake reality assiduously created by your masters at Wall Street in the land of the free.

And don't forget to look for ISIS assassins under your bed.  They hate you for your freedoms.

CrimsonAvenger's picture

Yes, they hate us for our freedoms. And we hate them for their unicorns.

Keltner Channel Surf's picture

Wonder what the market reaction would be if Yellen appeared on roller skates?

"I'm not waiting on a lady, I'm just waiting on the Fed"

Winston Churchill's picture

If he was naked, +1000 points on the stalingrad & poorski, on the grounds that

it can only get better from there.

Keltner Channel Surf's picture

Perhaps, Mr. Churchill, one of your oustanding quotes would be appropriate here:

"However beautiful the strategy, you should occasionally look at the results"

Dr. Engali's picture

"robots don’t steal jobs, the U.S. labor market is less flexible than it was, and workers haven’tsuffered unprecedented periods out of work"


 These people are fucking insane and have no idea what's going on in the real world. If robots don't steal jobs then why make them in the first place? You make them to replace the biggest impact to the bottom line.... payroll.

Winston Churchill's picture


Your voice might carry up to the ivory towers.

LawsofPhysics's picture

Wake us when we finally get on with cleaning those towers out.  This is the only thing I will make time for at this point.

Dr Hackenbush's picture

Ironic, given robots run the economy

FuzzyDunlop21's picture

I dont disagree with the robots conclusion. Hayek brought this up decades ago. Technological innovation results in creative destruction. The McD's worker becomes unemployed, but engineers, repairman, computer geeks, etc all become employed to produce the machine. The end result is a zero net change in employment, but McDonalds is able to produce more burgers faster, more consistently, and without the asshole cook putting pubes in the food. Its a zero-sum process. I know economists get paid for mental masturbation, but they are likely right on this one

madbraz's picture

No papers on imminent seismic activity in the Jackson Hole area?  That might take care of the greatest economic malaise of all - economists.

BuddyEffed's picture

Jackson Hole is rather close to an overdue caldera.

toady's picture

The topics are a little employment-heavy, no? And the one employment related topic that is important, full time, full benefits, full pension, jobs are being replaced by part time nothing else jobs, is not addressed.

RaceToTheBottom's picture

The subject is valid for all types of jobs.  I perform a pretty specialized bit of consulting on how people manage projects (both people processes and computer tools).

For the last 10 years, I have been entirely contract.  1099 role to a company that provides that role to the end customer.  So it is hitting higher end jobs as well as low end jobs.

toady's picture

Agreed. I didn't mean to imply full time & benefits on the low end, but across the entire spectrum.

I was 1099 my last 12 years, after they hammered me before I could vest.

RiskyBidness's picture

Thanks for pointing that out BoR!!  I like to trade this one.......I missed the headline!!

Squid Viscous's picture

Mr. Yellen will send the SPX through 2000, bank on it...

Raoul_Luke's picture

You get an upvote just for that awsome nic!

RiskyBidness's picture

The glory hole in jackson hole is what it should be called.  Yellen suckin cock through a diamond studded panel of plywood!!  BTFGH!!  Buy the Fuckin Glory Hole!!

Bernanke'sDaddy's picture

Man, I'd LOVE to be the supplier of drugs and prostitutes at this meeting. Can you imagine the markups you could get away with?

Yes, professor Davis, it's $10,000 for Candy to put on this 14" black strap on and do you. It's called PRICE DISCOVERY, BITCHEZ.

Bernanke'sDaddy's picture

Fuck you professor Davis. I know you read this website, you worthless shill.

DavidC's picture

I'm reminded of a line in The Shawshank Redemption and to paraphrase it;

'How can they be so obtuse?'.


hoist the bs flag's picture

honestly..these bubble blowers can go Ef' themselves.

venturen's picture

if your world is only NY, Washington, Hollywood and Silicon is about right. Any mention of the $4 Trillion reward to criminal bankers and where in the world is Jon Corzine? 

himaroid's picture

Whipsaw time, old yellen hawkish, then dawghi dovish.

Bill of Rights's picture

FED ( Mouth pieces ) recap


US is still an economy with a significant slack in the labour market
Still not the time to raise interest rates, will not likely to happen until the middle of next year
Wants to raise rates gradually and doesn’t want to upset markets


urges patience
first hike to come in middle of 2015

Speaking on BBG radio from Jackson Hole


Says Central bank needs to change guidance
Fed should signal earlier rate rise on economy
Says trend growth is about 2.5% and predicts growth will come in about 3.0%


Says he’s worried about inflation expectations slipping in Europe
ECB needs to take action
Another recession in Europe would be a serious issue for US monetary policy
Says he’s sticking to Q1 2015 forecast for first rate hike
Disagrees with Fed’s description of labour resources
Committee doing a lot more on exit strategy

MrBoompi's picture

If employers could save money by having a robot "recognize a chair", they'd build a damn robot for it. There are no jobs for chair recognition, but there are for cutting, assembling, and coating wood products, and that's where you find the robots. Sometimes I think these so-called economic experts lack common sense.

RaceToTheBottom's picture

Exactly, Recognizing chairs is the definition of a minimum wage job!


InflammatoryResponse's picture



I almost died laughing with your "... lack common sense."


They lack a WHOLE lot more than that. 



papaswamp's picture

Well this explains why the worker is fucked. 'They' believe all is well. Guess the 35% on wellfare and almost 50% on some form of govt subsidy is a mirage...

Dungholio's picture

Don't robots control the markets???

dontgoforit's picture

It's amazing to hear these folks.  They somehow get the idea that their Phd's and credentials make them experts on everythng.  Most - like our POTUS - have never held a real job, one that requires, you know, work; and yet they spout off like they understand deep dark mysterious stuff.  Well, it probably is deep, dark and mysterious to them, because they've never worked in the real world.  How many of them do you think could change out a set of shock absorbers or build a barn?  Useless mouthpieces.

tempo's picture

Detail on commission/tips/intern only jobs would expose the ugly nature of the current job market.

p00k1e's picture

This is the change Holder was describing – during the city roast is it OK to loot?  C’mon….? 

A leading Republican statees, “They're crazy out there and they're rapidly developing a method of blowing up a major U.S. city and people just can't believe that's happening.”

WTFx10's picture

To US military drone operators,

Can one of you who actually beleives in the constitution and what it did represent send a couple of hellfire missles at Jackson hole and actually turn it into a hole.

Send a couple at each of the Feds private central banks too just so they understand the message.


nakki's picture

More people doing absolutely nothing and pusing paper. Little manufacturing and good paying blue collar jobs gone. It's the inflexible old people fault. Has nothing to do with cities dying, $$ created going and staying into the wealthiest of the wealthiest pockets. Has nothing to do with the misallocation of funds to wipe out "our enemies" and protect "our" interests. What a wonderful "ivory tower" world theses people live in. Aside did anybody notice old Hagel mentioning "our interests"? Same speech George Bush #1 used way back in 1991 right before we went into Iraq the first time. 23 years and 4 presidents later and "we" are still there. Protecting "our" interests indeed.