Craighead’s Paper Published in Macroeconomics Journal

Bill Craighead

Bill Craighead

Bill Craighead, assistant professor of economics, is the author of a paper titled “Monetary Rules and Sectoral Unemployment in Open Economies” published in the June 2014 issue of the Journal of Macroeconomics.

Search theory has given us a more realistic mechanism to study unemployment in macroeconomic models. In this paper, Craighead integrated search theory into an “open economy” macroeconomic model – i.e., a model of an economy that interacts with the rest of the world.  One important question in open economy models is what measure of inflation should monetary policy respond to – consumer prices, which include imported goods, or producer prices (the prices of domestically-produced output).  In this model, Craighead shows that monetary policies that focus on producer prices do a better job of stabilizing unemployment.

Olivia Drake

Olivia (M.A.L.S. '08) is editor of the Wesleyan Connection newsletter and campus photographer. I have two dogs, five chickens and 30 house plants. I like snow, photographing firemen and enjoying "stinky" cheeses. Send me your story ideas to newsletter@wesleyan.edu. 

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