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Wealth effects and cross-country co-movement of labor

Author

Listed:
  • Quoc hung Nguyen

    (Institute of Developing Economies, Japan)

Abstract

This paper quantitatively shows that the wealth effect on leisure plays a determining role in generating negative co-movement of employment across countries. Hence, even without restrictions on international capital mobility, a positive cross-country correlation of labor can be obtained by simply incorporating into standard models preferences that rule out the wealth effect.

Suggested Citation

  • Quoc hung Nguyen, 2011. "Wealth effects and cross-country co-movement of labor," Economics Bulletin, AccessEcon, vol. 31(2), pages 1362-1371.
    • Handle: RePEc:ebl:ecbull:eb-11-00045
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I2-P127.pdf
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    References listed on IDEAS

    as
    1. Schmitt-Grohe, Stephanie & Uribe, Martin, 2004. "Solving dynamic general equilibrium models using a second-order approximation to the policy function," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 755-775, January.
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    More about this item

    Keywords

    International Business Cycles; Wealth Effects; GHH Preferences;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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