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Labor Market Imperfections and the Dynamics of Postwar Business Cycles

Author

Listed:
  • Steve Ambler
  • Alain Guay
  • Louis Phaneuf

Abstract

An estimated dynamic general equilibrium model which features imperfectly competititve households, sticky nominal wages and costly labor input adjustment is shown to be consistent with several stylized aspects of U.S. postwar business cycle dynamics including the positive serial correlation of output, consumption, investment and employment growth over short horizons and the persistent, hump-shaped response of output to innovations in the temporary component.

Suggested Citation

  • Steve Ambler & Alain Guay & Louis Phaneuf, 2003. "Labor Market Imperfections and the Dynamics of Postwar Business Cycles," Cahiers de recherche 0319, CIRPEE.
    • Handle: RePEc:lvl:lacicr:0319
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    File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2003/CIRPEE03-19.pdf
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    Citations

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    Cited by:

    1. Fève, P. & Matheron, J., 2005. "Can the Kydland--Prescott Model Pass the Cogley--Nason Test?," Working papers 125, Banque de France.
    2. Chahnez Boudaya, 2006. "Stage-specific technology shocks and employment :could we reconcile with the RBC models?," Cahiers de la Maison des Sciences Economiques v06043, Université Panthéon-Sorbonne (Paris 1).
    3. Louis Phaneuf & Nooman Rebei, 2007. "Technology Shocks and Business Cycles: The Role of Processing Stages and Nominal Rigidities," Staff Working Papers 07-7, Bank of Canada.
    4. Steve Ambler & Ali Dib & Nooman Rebei, 2003. "Nominal Rigidities and Exchange Rate Pass-Through in a Structural Model of a Small Open Economy," Staff Working Papers 03-29, Bank of Canada.
    5. Louis Phaneuf & Nooman Rebei, 2008. "Production Stages and the Transmission of Technological Progress," Cahiers de recherche 0802, CIRPEE.
    6. Steve Ambler & Ali Dib & Nooman Rebei, 2004. "Optimal Taylor Rules in an Estimated Model of a Small Open Economy," Staff Working Papers 04-36, Bank of Canada.
    7. Nooman Rebei, 2004. "Characterization of the Dynamic Effects of Fiscal Shocks in a Small Open Economy," Staff Working Papers 04-41, Bank of Canada.
    8. Kevin Moran, 2005. "Learning and the Welfare Implications of Changing Inflation Targets," Cahiers de recherche 0511, CIRPEE.
    9. M. Alper Çenesiz & Christian Pierdzioch, 2010. "Financial Market Integration, Costs of Adjusting Hours Worked and Monetary Policy," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 39(1‐2), pages 1-25, February.
    10. Alexopoulos, Michelle, 2007. "A monetary business cycle model with unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 31(12), pages 3904-3940, December.

    More about this item

    Keywords

    Imperfectly competitive households; Sticky nominal wages; Labor adjustment costs; Business cycles; Endogenous propagation mechanisms;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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