In a short op-ed for the Wall Street Journal and a paper co-authored with James Spletzer of the U.S. Census Bureau, Edward Lazear, an economist at Stanford GSB and CEA chair during President Bush’s second term, argues that underlying changes in the structure of the U.S. economy don’t account for high unemployment levels, e.g.:
Whatever mismatch exists today was also present when the labor market was booming. Turning construction workers into nurses might help a little, because some of the shortages in health and other industries are a long-run problem. But high unemployment today is not a result of the job openings being where the appropriately skilled workers are unavailable.
This is encouraging in that it implies that a return to growth really will serve as a remedy for high unemployment levels, but of course this raises the question of how we will achieve a return to growth. Michael Woodford has ideas as to how we might use monetary policy to achieve that goal, and John Cochrane takes strong exception to them.