Rodrigues Madeira, Joao Antonio orcid.org/0000-0002-7380-9009 (2017) Assessing the empirical relevance of labor frictions to business cycle fluctuations. Oxford Bulletin of Economics and Statistics. pp. 1-21. ISSN 0305-9049
Abstract
This paper describes a DSGE model augmented with labor frictions, namely: indivisible labor, predetermined employment and adjustment costs. This improves the fit to the data as shown by a higher log marginal likelihood and closer match to key business cycle statistics. The labor frictions introduced are relevant for model dynamics and economic policy: the effect of TFP shocks on most macroeconomic variables is substantially mitigated; fiscal policy leads to a greater crowding out of private sector activity and monetary policy has a lower impact on output. Labor frictions also provide a better match to impulse response functions from VAR models.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2017 The Department of Economics, University of Oxford and John Wiley & Sons Ltd. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details. |
Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Economics and Related Studies (York) |
Depositing User: | Pure (York) |
Date Deposited: | 09 Nov 2017 14:04 |
Last Modified: | 29 Oct 2024 00:58 |
Published Version: | https://doi.org/10.1111/obes.12215 |
Status: | Published online |
Refereed: | Yes |
Identification Number: | 10.1111/obes.12215 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:123730 |