Working paper
Flexible prices, labor market frictions and the response of employment to technology shocks
- Abstract:
- Recent empirical evidence establishes that a positive technology shock leads to a decline in labor inputs. Can a flexible price model enriched with labor market frictions replicate this stylized fact? We develop and estimate a standard flexible price model using Bayesian methods that allows, but does not require, labor market frictions to generate a negative response of employment to a technology shock. We find that labor market frictions account for the fall in labor inputs.
- Publication status:
- Published
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(Preview, Version of record, pdf, 222.2KB, Terms of use)
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Authors
- Publisher:
- University of Oxford
- Series:
- Department of Economics Discussion Paper Series
- Publication date:
- 2013-11-13
- Paper number:
- 683
- Keywords:
- Pubs id:
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1143730
- Local pid:
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pubs:1143730
- Deposit date:
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2020-12-15
- ARK identifier:
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- Copyright date:
- 2013
- Rights statement:
- Copyright 2013 The Author(s)
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