2 edition of Labor hoarding and the business cycle found in the catalog.
Labor hoarding and the business cycle
|Statement||Craig Burnside, Martin Eichenbaum, Sergio Rebelo.|
|Series||NBER working papers series -- working paper no. 3556, Working paper series (National Bureau of Economic Research) -- working paper no. 3556.|
|Contributions||Eichenbaum, Martin S., Rebelo, Sergio.|
|The Physical Object|
|Pagination||40, 6 p. :|
|Number of Pages||40|
Constantinides, M. First, these mechanisms make true technology shocks less volatile than TFP. However, there is 13 a recent vintage of multiple equilibrium models that use more plausible calibrations. Instead, Hall assumes that the surplus is allocated by keeping the nominal wage constant. It would have been easy to extend this review into a full-blown survey of the literature. The bottom panel of table 4 shows smaller inter-quintile ranges of changes in those recessions than in the Great Recession and smaller inter-quintile ranges in changes in the recovery phases than in the recovery from the Great Recession.
In a closed economy set-up, net exports are added to government consumption. We used total population for China since we do not have adult population data. Previously, cycle theory was characterized by a macro approach and utilized nonlinearities either through piecewise 'linear models or with the aid of Classical theorems in the field of dynamic systems. First, these mechanisms make true technology shocks less volatile than TFP.
We find that variable capital utilization rates substantially magnify and propagate the impact of shocks to agents' environments. If output is high relative to trend in this quarter, it is likely to continue above trend in the next quarter. We document that while efficiency wedges do contribute in a large part to growth, especially in Brazil and Russia, there is an increasing importance of investment wedges especially in the late s, noted in China and India. Another controversial aspect of RBC models is the role of technology shocks in generating recessions. But, as in the recession, the averages masque huge variation: a 78 percent employment drop in the bottom quintile compared to a
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By contrast a firm that treated labor as completely variable would lay off 10 percent of its work force when output fell by 10 percent and rehire all those workers when output regained the pre-recession level.
Investment is about three times more volatile than output, and nondurables consumption is less volatile 3 than output. The strength of these propagation effects is evident in the dynamic response functions of various economy wide aggregates to Labor hoarding and the business cycle book in agents' environments, in the statistics that we construct to summarize the strength of the propagation mechanisms in the model and in the volatility of exogenous technology shocks needed to explain the observed variability in aggregate U.
This property results from the fact that in the model all variation in hours worked comes from the extensive margin, i. Multiple equilibrium models have two attractive features. However, there is 13 a recent vintage of multiple equilibrium models that use more plausible calibrations. As a result, the desire for smooth consumption introduced by habit formation generates volatile equity returns and a large equity premium.
This rise in returns on investment is more likely to occur if additional workers can be employed without a substantial increase in real wage rates. But, as in the recession, the averages masque huge variation: a 78 percent employment drop in the bottom quintile compared to a It is not surprising that a paper with so many new ideas has shaped the macroeconomics research agenda of the last two decades.
Second, multiple equilibrium models tend to have strong internal persistence, so such models do not need serially correlated shocks to generate persistent macroeconomic time series.
This model requires strong complementarity between durables and nondurables consumption, and abstracts from capital as an input into the production of investment goods. These differences in employment responses challenge simple models of how enterprises adjust employment in downturns and recoveries.
More Research by:. More generally, sticky wage models raise the question of whether wage rates are allocational over the business cycle. Only the estimated coefficients on capital-to-labor ratios show similar patterns in both phases of the cycle, with capital-intensive firms expanding more in output and employment.
Handbook of International Economics, vol. Please note that corrections may take a couple of weeks to filter through the various RePEc services. Agents must often change their views about the future, but they must do so in a coordinated manner.
Oil Shocks Movements in oil and energy prices are loosely associated with U.
Changes in energy prices have historically preceded cycles, but energy prices are fundamentally different than productivity shocks in that Labor hoarding and the business cycle book only represent a move along the production function instead of a shift in the function Changes in terms of trade as shocks — Mendoza can account for even more fluctuation than productivity shocks empirically Not subject to econometric testing, no measure of performance Cannot account for periodicity of cycles — generally weak propagation mechanism Kydland and Prescott fatigue effect and time-to-build model does not account for enough of a propagation mechanism Labor hoarding and the business cycle book and Nason examine various models for their ability to generate sufficient output movements from shocks and only home production and labor hoarding can generate serial correlation in output endogenously for labor hoarding this effect is actually negative.Labor Compensation over the Cycle Although the qualitative behavior oflabor inputs over the business cycle seems relatively well established, there is very little agreement about how to characterize the cyclical movements of labor compen sation, especially of.
In this respect this work is more in the spirit of Burnside, Eichenbaum, and Rebelo () (BER for short), who look at implications of labor hoarding for business cycle theory.
In BER's general equilibrium model the production technology in- cludes labor hoarding, while consumers' utility is decreasing in tjarrodbonta.com by: The most active question of investigation in recent empirical business-cycle anal-ysis has been the relative importance of aggregate demand shocks and technology shocks as a source of fluctuations.
The motivation for this question is the issue of whether Keynesian or real-business-cycle models provide the more relevant descrip-tion of cycles.This book presents several pieces of empirical work which disentangle why pdf standard measure of productivity growth used in macroeconomics turn out to be procyclical for American manufacturing industries.
Procyclical productivity is an essential.the real business cycle theory argues. real shocks to the economy are the primary cause of business cycles. labor hoarding.
labor hoarding occurs when. bc of the costs of firing and hiring workers, firms retain some workers in a recession they they would otherwise lay off.VI. Task Assignment over the Ebook Cycle.
In Section V, I provided evidence that task assignment is correlated with state-industry employment.
An important issue is whether this form of labor-hoarding behavior is procyclical.