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on Dynamic General Equilibrium |
| By: | Chahnez Boudaya (Centre d'Economie de la Sorbonne) |
| Abstract: | This paper analyses the response of labor input to technology shocks in an estimated two-stage production framework with both price and wage stickiness and stage-specific shocks to productivity. Our model features a vertical input-output structure with imperfect mobility of labors across stages. The estimation uses the maximum likelihood technique applied to the post-war US data. Our findings could easily match the standard RBC models predictions : A shock to productivity in the intermediate good production stage i) leads to an increase in both stage-specific labor and the aggregate labor and ii) explains a large proportion of the volatility of both the real GDP and the aggregate labor. Besides, regarding the output-labor correlation, the model does a very good job in matching the data. |
| Keywords: | RBC models, sticky prices, sticky wages, production chain, employment, technology shocks, sectoral comovements. |
| JEL: | E24 E32 E52 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:v06043&r=dge |
| By: | Rafael Domenech (Institute of International Economics, University of Valencia); Javier Andres; Javier Ferri |
| Abstract: | The successful matching model developed by Mortensen and Pissarides seems to find its hardest task in explaining the cyclical movements of some key labor market variables such as the vacancy rate and the vacancy-unemployment ratio. Several authors have discussed mechanisms compatible with the matching technology that are able to deliver the kind of correlations observed in the data. In this paper we explore four such additional mechanisms embedded in a full blown SDGE model. We find that price rigidity greatly improves the model's empirical performance making it capable of reproducing second moments of the data. Other components such as intertemporal substitution, endogenous match destruction, capital accumulation and distortionary taxes also play a relevant role. |
| Keywords: | unemployment, vacancies, business cycle, price rigidities |
| JEL: | E24 E32 J64 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iei:wpaper:0601&r=dge |
| By: | Aliprantis, C.D.; Camera, Gabriele; Puzzello, D. |
| Abstract: | We study an infinite-horizon economy with two basic frictions that are typical in monetary models. First, agents’ trading paths cross at most once due to pairwise trade and other meeting obstacles. Second, actions must be compatible with individual incentives due to commitment and enforcement limitations. We find that, with patient agents, relaxing the first friction by introducing centralized markets, opens the door to an informal enforcement scheme sustaining a non-monetary efficient allocation. Hence, we present a matching environment in which agents repeatedly access large markets and yet the basic frictions are retained. This allows the construction of models based on competitive markets in which money plays an essential role. |
| Keywords: | Money ; Infinite games ; Matching models ; Social norms |
| JEL: | C72 C73 D80 E00 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1179&r=dge |
| By: | Elke J. Jahn (Institute for Employment Research (IAB), University of Erlangen-Nuremberg and IZA Bonn); Thomas Wagner (University of Applied Sciences, Nuremberg) |
| Abstract: | Unemployment benefits, benefit duration, base period and qualifying period are constituent parameters of the unemployment insurance system in most OECD countries. From economic research we know that the amount and duration of unemployment benefits increase unemployment. To analyze the effects of the other two parameters we use a matching model with search frictions and show that there is a trade-off between the qualifying and the base period on the one hand and the amount and duration of the unemployment benefits on the other. A country that combines a high level of unemployment benefits with a long benefit duration can neutralize the effect on the equilibrium rate of unemployment with a long qualifying and/or a short base period. |
| Keywords: | matching model, unemployment insurance, base period, qualifying period, labor market policy |
| JEL: | J41 J64 J68 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2151&r=dge |