UC San Diego

This dissertation studies three policy-oriented macroeconomic questions. The first chapter examines whether traditional monetary policy in the U.S. becomes less effective when foreign governments accumulate large amounts of Treasury debt. I estimate a macro-finance model and find foreign official purchases have shifted the entire yield curve down. This suggests the increasing presence of international factors in U.S. financial markets influences the Federal Reserve's interest rate policy. The second chapter asks why low-skilled men are less likely to be employed relative to high-skilled men and why this differential has increased since the 1970s. I build and calibrate a labor-search model and find a demand shift and job separations are the main drivers of employment inequality, while a supply shift had no robust effects, and search frictions actually reduced employment inequality since the 1970s. The third and final chapter studies why wages of newly hired workers are more pro-cyclical than wages of workers who do not switch jobs. We construct a novel measure of occupational mismatch by comparing a newly hired worker's current skill profile to his previous skill profile. Including our measure of occupational mismatch in standard wage regressions can account for half of the new hire wage cyclicality previously documented in the literature.