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International immigration flows are large, volatile, and increasing. We document the dynamic implications of immigration, and account for the differential unemployment and labor force participation rates between immigrants and natives. To quantify the effects of immigration, we use Swedish population registry data and productivity estimates from a matched employer-employee dataset. A refugee (economic) immigration shock yields large initial negative (positive but delayed) effects on GDP per capita and employment rates, substantially larger than, but with the same sign as the corresponding steady state effects. This reflects the empirical fact that labor market integration is a gradual process over many years.

We study various macroprudential tools and their interaction with monetary policy in a New Keynesian model featuring long-term debt, illiquid housing and an effective lower bound constraint on policy rates. We find that the short-run deleveraging costs of different macroprudential tools - all sized to imply the same reduction in household debt in the medium and long-term - can differ significantly, depending on the state of economy and monetary policy. Specifically, a loan-to-value tightening is more than three times as contractionary as a loan-to income tightening when debt is high and monetary policy cannot accommodate.

We show that business cycles reduce welfare through a decrease in the average level of employment in a labor market search model with learning on the job and skill loss during unemployment. Empirically, unemployment and the job-finding rate are negatively correlated. Since new jobs are the product of these two from the employment transition equation, business cycles imply fewer new jobs. Learning on the job implies that the resulting decrease in employment reduces aggregate human capital. This reduces incen-tives to post vacancies, further decreasing employment and human capital. We quantify this mechanism and find large output and wel-fare costs of business cycles.

Large movements in house prices can have broad and substantial effects on the macroeconomy. This column uses property-level data to identify the key drivers of house price volatility and decompose this into national, regional, local, and idiosyncratic components. There is substantial cross-sectional variation in house price risk, with higher firm concentration, employment volatility, and manufacturing share of output and employment associated with greater risk. 

The Great Recession has spawned a vigorous debate regarding the potential benefits of stabilising the real economy. This issue takes on additional importance as the current economic situation in some countries, including the US, seem to imply an interesting monetary policy trade-off between stabilising the inflation and the unemployment level. This column summarises research indicating that stabilising the real economy raises the long-run level of output.

John Hassler har publicerat en debattartikel där han hävdar att Sveriges ekonomi växer långsamt och att detta beror på ett antal strukturella problem. Jag delar helt hans syn att det finns ett antal strukturella problem för svensk ekonomi: bristande utbildningssystem, fallerad hyresmarknad för bostäder, plottrigt skattesystem etc. Däremot förefaller Hasslers argumentation om att Sverige har låg tillväxt och därmed dennas koppling till de strukturella problemen vila på svag grund.