Wage Stickiness and Nonclearing Labor Market in Business Cycles ∗
نویسندگان
چکیده
This paper presents a dynamic optimization model of RBC type augmented by wage stickiness, and nonclearing labor market. Agents are required to adaptively optimize when facing constraints on the markets. Calibration for the U. S. economy shows that the model will produce higher volatility in employment. Moreover, it provides more reasonable cross-correlation of employment and wages with other macroeconomic variables and improves on the correlation of the technology shock with employment. Overall, the model fits the data better than the benchmark RBC model.
منابع مشابه
Business Cycles , Wage Stickiness and Labor Market Disequilibrium
Real Business Cycles are often studied in the context of the general equlibrium framework with competitive markets, flexible wages and prices. This restricts the effective application of intertemporal models to the real world business cycles. Stickiness of wages and prices have been considered in recent monopolistic competition models. In this paper, we go a step further and separate labor supp...
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