earticle

영어

This study explores the evolving probability distribution of the two closely monitored macroeconomic phenomena, i.e., employment growth rate and inflation rate in the U.S. economy from 1971 to 2023 by constructing copula. Employment growth rate rather than unemployment rate was chosen to overcome the gray area of disappointed unemployment. We find it hard to perceive the economy where we live in the objective way, and we often try to figure it out or to forecast like narrow-sighted little men touching a colossal elephant. Copulas for the U.S. employment growth rate and inflation rate for each decade and each crisis help us to visualize the macroeconomic shapes although copula does not show a one-to-one correspondence with theoretical relationships. Copula shows a history and allows us to compare different eras in a succinct way by maximum likelihood based on realized data. In the end, final data points contain countless stories and circumstances, and we need to see them at one glance to capture essential features, sometimes. This simplification allows us to see concordant(discordant) relationship and tail dependence revealing the intensity of a tendency. During the tapering period before the Covid-19 pandemic crisis(Nov. 2014 ~ Feb. 2020) in the U.S. economy, we find high likelihood of high employment growth rate and low inflation rate. It gives us a promising sign that dismal macroeconomic states are not necessarily inevitable.