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Author: Carlos Carrillo-Tudela
Publisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 64
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Book Description
This paper develops and estimates a fully microfounded equilibrium business cycle model of the US labor market with aggregate productivity shocks. Those microfoundations are consistent with evidence regarding the underlying distribution of firm growth rates across firms [by age and size] and, when aggregated, are consistent with macro-evidence regarding gross job creation and job destruction flows over the cycle. By additionally incorporating on-the-job search, we systematically characterise the stochastic relationships between aggregate job creation and job destruction flows across firms, gross hire and quit flows [churning] by workers across firms, as well as the persistence and volatility of unemployment and worker job finding rates over the cycle.
Author: Carlos Carrillo-Tudela
Publisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 64
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Book Description
This paper develops and estimates a fully microfounded equilibrium business cycle model of the US labor market with aggregate productivity shocks. Those microfoundations are consistent with evidence regarding the underlying distribution of firm growth rates across firms [by age and size] and, when aggregated, are consistent with macro-evidence regarding gross job creation and job destruction flows over the cycle. By additionally incorporating on-the-job search, we systematically characterise the stochastic relationships between aggregate job creation and job destruction flows across firms, gross hire and quit flows [churning] by workers across firms, as well as the persistence and volatility of unemployment and worker job finding rates over the cycle.
Author: Andreas Pollak
Publisher: Mohr Siebeck
ISBN: 9783161493041
Category : Business & Economics
Languages : en
Pages : 204
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Book Description
Designing a good unemployment insurance scheme is a delicate matter. In a system with no or little insurance, households may be subject to a high income risk, whereas excessively generous unemployment insurance systems are known to lead to high unemployment rates and are costly both from a fiscal perspective and for society as a whole. Andreas Pollak investigates what an optimal unemployment insurance system would look like, i.e. a system that constitutes the best possible compromise between income security and incentives to work. Using theoretical economic models and complex numerical simulations, he studies the effects of benefit levels and payment durations on unemployment and welfare. As the models allow for considerable heterogeneity of households, including a history-dependent labor productivity, it is possible to analyze how certain policies affect individuals in a specific age, wealth or skill group. The most important aspect of an unemployment insurance system turns out to be the benefits paid to the long-term unemployed. If this parameter is chosen too high, a large number of households may get caught in a long spell of unemployment with little chance of finding work again. Based on the predictions in these models, the so-called "Hartz IV" labor market reform recently adopted in Germany should have highly favorable effects on the unemployment rates and welfare in the long run.
Author: Christopher A. Pissarides
Publisher: MIT Press
ISBN: 9780262264068
Category : Business & Economics
Languages : en
Pages : 278
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Book Description
This book focuses on the modeling of the transitions in and out of unemployment, given the stochastic processes that break up jobs and lead to the formation of new jobs, and on the implications of this approach for macroeconomic equilibrium and for the efficiency of the labor market. An equilibrium theory of unemployment assumes that firms and workers maximize their payoffs under rational expectations and that wages are determined to exploit the private gains from trade. This book focuses on the modeling of the transitions in and out of unemployment, given the stochastic processes that break up jobs and lead to the formation of new jobs, and on the implications of this approach for macroeconomic equilibrium and for the efficiency of the labor market. This approach to labor market equilibrium and unemployment has been successful in explaining the determinants of the "natural" rate of unemployment and new data on job and worker flows, in modeling the labor market in equilibrium business cycle and growth models, and in analyzing welfare policy. The second edition contains two new chapters, one on endogenous job destruction and one on search on the job and job-to-job quitting. The rest of the book has been extensively rewritten and, in several cases, simplified.
Author: Fischer Black
Publisher: John Wiley & Sons
ISBN: 0470499176
Category : Business & Economics
Languages : en
Pages : 224
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Book Description
An updated look at what Fischer Black's ideas on business cycles and equilibrium mean today Throughout his career, Fischer Black described a view of business fluctuations based on the idea that a well-developed economy will be continually in equilibrium. In the essays that constitute this book, which is one of only two books Black ever wrote, he explores this idea thoroughly and reaches some surprising conclusions. With the newfound popularity of quantitative finance and risk management, the work of Fischer Black has garnered much attention. Business Cycles and Equilibrium-with its theory that economic and financial markets are in a continual equilibrium-is one of his books that still rings true today, given the current economic crisis. This Updated Edition clearly presents Black's classic theory on business cycles and the concept of equilibrium, and contains a new introduction by the person who knows Black best: Perry Mehrling, author of Fischer Black and the Revolutionary Idea of Finance (Wiley). Mehrling goes inside Black's life to uncover what was occurring during the time Black wrote Business Cycles and Equilibrium, while also shedding light on what Black would make of today's financial and economic meltdown and how he would best advise to move forward. The essays within this book reach some interesting conclusions concerning the role of equilibrium in a developed economy Warns about the use and abuse of modeling Explains the risky business of risk in a straightforward and accessible style Contains chapters dedicated to "the effects of uncontrolled banking," "the trouble with econometric models," and "the effects of noise on investing" Includes commentary on Black's life and work at the time Business Cycles and Equilibrium was written as well as insight as to what Black would make of the current financial meltdown Engaging and informative, the Updated Edition of Business Cycles and Equilibrium will give you a better understanding of what is really going on during these uncertain and volatile financial times.
Author: Melvyn G. Coles
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 34
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Book Description
This paper considers a dynamic, non-steady state environment in which wage dispersion exists and evolves in response to shocks. Workers do not observe firm productivity and firms do not commit to future wages, but there is on-the-job search for higher paying jobs. The model allows for firm turnover (new start-up firms are created, some existing firms die) and firm specific productivity shocks. In a separating equilibrium, more productive firms signal their type by paying strictly higher wages in every state of the market. Consequently, workers always quit to firms paying a higher wage and so move efficiently from less to more productive firms. As a further implication of the cost structure assumed, endogenous firm size growth is consistent with Gibrat's law. The paper provides a complete characterization and establishes existence and uniqueness of the separating (non-steady state) equilibrium in the limiting case of equally productive firms. The existence of equilibrium with any finite number of firm types is also established. Finally, the model provides a coherent explanation of Danish manufacturing data on firm wage and labor productivity dispersion as well as the cross firm relationship between them -- National Bureau of Economic Research web site.
Author: Motty Perry
Publisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 23
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Book Description
This paper presents a wage bargaining model in which the employer and employee are each uncertain about the other's reservation wage. Under specified circumstances, the model's equilibrium is shown to involve unilateral wage setting and inefficient labor turnover. In addition, aggregate demand shocks affect the equilibrium in a way that produces procyclical quits and countercyclical layoffs.These results are obtained without resorting to assumptions of nominal wage rigidity, long-term contracting, or aggregate price misperceptions
Author: George Saridakis
Publisher: Edward Elgar Publishing
ISBN: 1784711152
Category : Business & Economics
Languages : en
Pages : 395
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Book Description
Covering the period of the financial crisis, this Research Handbook discusses the degree of importance of different driving forces on employee turnover. The discussions contribute to policy agendas on productivity, firm performance and economic growth. The contributors provide a selection of theoretical and empirical research papers that deal with aspects of employee turnover, as well as its effects on workers and firms within the current socio-economic environment. It draws on theories and evidence from economics, management, social sciences and other related disciplines. With its interdisciplinary approach, this book will appeal to a variety of students and academics in related fields. It will also be of interest to policy makers, HR experts, firm managers and other stakeholders.
Author: Thomas F. Cooley
Publisher: Princeton University Press
ISBN: 0691218056
Category : Business & Economics
Languages : en
Pages : 442
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Book Description
Among the most revolutionary and productive areas of economic research over the last two decades, modern business cycle theory is finally made accessible to students and professionals in this rigorous, unified, introductory volume. This theory starts with the view that growth and fluctuations are not distinct phenomena to be studied separately--and that business cycles result from shocks (such as the availability of new technologies), which regularly affect most economies. The unifying theme of this book is the use of the neoclassical growth framework to study the economic fluctuations associated with the business cycle. Presenting recent advances in dynamic economic theory and computational methods--with emphasis on the construction of equilibrium paths for simple artificial economies--leading experts orient readers in the quantitative study of aggregate fluctuations and apply its concepts to key issues in macroeconomics and business cycle theory. This volume covers such issues as the aggregate labor market, the role of the household sector, the role of money, the behavior of asset markets, non-Walrasian economies, monopolistically competitive economies, international business cycles, and the design of economic policies. The contributors are David Backus, V. V. Chari, Lawrence Christiano, Thomas F. Cooley, Jean-Pierre Danthine, John Donaldson, Jeremy Greenwood, Gary D. Hansen, Patrick Kehoe, Finn Kydland, Edward C. Prescott, Richard Rogerson, Julio Rotemberg, Geert Rouwenhorst, José-Víctor Ríos-Rull, Michael Woodford, and Randall Wright.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 21
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Book Description
Author: Carlos Carrillo-Tudela
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Workers might change jobs for many reasons. They might fall out with the boss and so decide to change employer, or learn that the job is not really for them, or they might accept a poorly paid job as being preferable to being unemployed - say gathering work experience improves one's CV - and continue search for something better while employed. A slightly different reason is that some firms may hit a sticky patch and, fearing the risk of layoff, employees quit to more permanent employment elsewhere. A competitive labor market ensures such quit turnover is efficient: it reallocates workers from less to more productive matches. In non-competitive labor markets, however, firms always have the incentive to increase profit by paying a wage below marginal product while, in the absence of slavery contracts, employees always retain the option of quitting to better paid employment. The interaction between these two forces need not generate efficient outcomes. The focus of this chapter is to consider new develpments in the search and matching literature where wages, quit turnover and unemployment are endogenously determined in economies with aggregate shocks. The aim of the discussion is not only to highlight possible market failures but also to explain how on-the-job search and employee turnover fundamentally affect our understanding of fluctuations in aggregate employment.
