Uncertainty, Wages and the Business Cycle

How Wages Change Over the Business Cycle

Modern economies experience recurrent fluctuations in business activity. As output and employment fall in recessions and busts and rise in recoveries and booms, other variables of economic significance also go through lows and highs. One such variable is real wages. Generally speaking, real wages are he cyclical behavior of real wages — wages adjusted for inflation — has changed over time. Befo...

Non-linear Dynamics of Real Wages over the Business Cycle

This paper aims at analysing the dynamic properties of real wages over the business cycle. We apply a Bayesian vector autoregressive (BVAR) model and analyse the possible asymmetric behaviour of real wages in response to different macroeconomic shocks. Finally, we use the NBER business cycle periodisation to evaluate how real wages interact with the different shocks during contractions and boom...

Business cycle uncertainty and economic welfare

Article history: Received 13 January 2011 Received in revised form 7 May 2014 Available online xxxx JEL classification: D51 E20 E32 E63

Creative Destruction and Uncertainty over the Business Cycle∗

Recessions are associated with increases in uncertainty. This paper shows that a simple model of creative destruction, in which new productive businesses push out old obsolete ones, produces increases in measured uncertainty during recessionary periods even without time-variation in second moments of exogenous shocks. Moreover, the suggested channel is also borne out by the data. Using an estab...

Business Cycle Features In The Iranian Economy