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Monetary policy and the asymmetric job creation and destruction behaviour

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  • De-Chih Liu

Abstract

This article explores whether monetary policy can account for the asymmetric job creation and job destruction behaviour in the Taiwanese manufacturing and service sectors during the period 1987 to 2003. This article finds evidence for positive steepness in the job destruction rate in the manufacturing sector and negative steepness in the job creation rate in the service sector. This article also finds that the monetary policy (discount rate) can help to explain the asymmetric job creation and job destruction behaviour. Importantly, this article finds that monetary policy stimulated job flow behaviour to a better regime. This evidence suggests that monetary policy may be an efficient instrument in stimulating the labour market in Taiwan.

Suggested Citation

  • De-Chih Liu, 2010. "Monetary policy and the asymmetric job creation and destruction behaviour," Applied Economics Letters, Taylor & Francis Journals, vol. 17(8), pages 773-780.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:8:p:773-780
    DOI: 10.1080/13504850802359903
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    References listed on IDEAS

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    7. Barro, Robert J & Gordon, David B, 1983. "A Positive Theory of Monetary Policy in a Natural Rate Model," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 589-610, August.
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