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On the transmission of us uncertainty shocks to the European labor market

Author

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  • Michel C. de Souza

    (Federal University of Jequitinhonha and Mucuri Valleys)

Abstract

We investigate the effects of a United States uncertainty shock on the European Union labor market by proposing a two-country Dynamic Stochastic General Equilibrium (DSGE) model with search and matching frictions and comparing the impulse response functions with data from twelve economies in a Bayesian Global Vector Autoregression (BGVAR) framework. Our results indicate that the Euro response is similar to a negative aggregate demand shock in the first eighteen months. However, afterward, the labor market frictions and trade intensity drive a stagflation process.

Suggested Citation

  • Michel C. de Souza, 2023. "On the transmission of us uncertainty shocks to the European labor market," Economics Bulletin, AccessEcon, vol. 43(4), pages 1666-1679.
    • Handle: RePEc:ebl:ecbull:eb-22-00423
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    References listed on IDEAS

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    More about this item

    Keywords

    Uncertainty; Labor; Trade;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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