Elasticity Of Intertemporal Substitution And Unemployment Volatility

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Elasticity of Intertemporal Substitution and Unemployment Volatility

Author : Dongweon Lee
Publisher :
ISBN 13 :
Total Pages : 55 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Elasticity of Intertemporal Substitution and Unemployment Volatility by : Dongweon Lee

Download or read book Elasticity of Intertemporal Substitution and Unemployment Volatility written by Dongweon Lee and published by . This book was released on 2014 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies how the elasticity of intertemporal substitution (EIS) influences labor market fluctuations in the labor search and matching model with both extensive and intensive margins of labor supply. With the curvature of utility, the countercyclical marginal utility of consumption induces the flow value of unemployment to be procyclical, and the stock returns to be countercyclical. The former effect reduces unemployment volatility by weakening wage rigidity. In contrast, the latter effect magnifies unemployment volatility by discounting higher future payoffs from hiring at a lower discount rate, if wages do not absorb all of productivity shocks. The higher EIS reduces the procyclicality of the flow value of unemployment, and reinforces the countercyclicality of the stock returns. We quantitatively show that a high level of the EIS is required to resolve the unemployment volatility puzzle.

The Political Economy of Wages and Unemployment

Author : William Oliver Coleman
Publisher : Edward Elgar Publishing
ISBN 13 : 1849808112
Total Pages : 251 pages
Book Rating : 4.8/5 (498 download)

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Book Synopsis The Political Economy of Wages and Unemployment by : William Oliver Coleman

Download or read book The Political Economy of Wages and Unemployment written by William Oliver Coleman and published by Edward Elgar Publishing. This book was released on 2010-01-01 with total page 251 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this tightly argued work William Coleman explores the macroeconomic implications of politically based restraints on competition in labour markets. Through a suite of compact models the author investigates the consequences of the labour force securing the best terms of sale for its labour by means of the electoral mechanism. He concludes that such ?electorally optimal' labour regulation can explain not only wage rigidity and unemployment, but also wage volatility; episodes of excess demand for labour; the co-existence of an inefficient state sector with an efficient private sector; and the preference for a minimum wage over a universal wage regulation. Finally, the approach can rationalise nominal wage rigidity, and not solely real wage rigidity. In sum, the analysis promises to both complete the Classical explanation of unemployment by predicting when, why and how real wages will be rigid, and at the same time to better secure Keynesian insights by suggesting how money rigidity may be characteristic of electorally optimal labour regulation.

Labor Markets and Business Cycles

Author : Robert Shimer
Publisher : Princeton University Press
ISBN 13 : 1400835232
Total Pages : 189 pages
Book Rating : 4.4/5 (8 download)

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Book Synopsis Labor Markets and Business Cycles by : Robert Shimer

Download or read book Labor Markets and Business Cycles written by Robert Shimer and published by Princeton University Press. This book was released on 2010-04-12 with total page 189 pages. Available in PDF, EPUB and Kindle. Book excerpt: Labor Markets and Business Cycles integrates search and matching theory with the neoclassical growth model to better understand labor market outcomes. Robert Shimer shows analytically and quantitatively that rigid wages are important for explaining the volatile behavior of the unemployment rate in business cycles. The book focuses on the labor wedge that arises when the marginal rate of substitution between consumption and leisure does not equal the marginal product of labor. According to competitive models of the labor market, the labor wedge should be constant and equal to the labor income tax rate. But in U.S. data, the wedge is strongly countercyclical, making it seem as if recessions are periods when workers are dissuaded from working and firms are dissuaded from hiring because of an increase in the labor income tax rate. When job searches are time consuming and wages are flexible, search frictions--the cost of a job search--act like labor adjustment costs, further exacerbating inconsistencies between the competitive model and data. The book shows that wage rigidities can reconcile the search model with the data, providing a quantitatively more accurate depiction of labor markets, consumption, and investment dynamics. Developing detailed search and matching models, Labor Markets and Business Cycles will be the main reference for those interested in the intersection of labor market dynamics and business cycle research.

NBER Macroeconomics Annual 1986

Author :
Publisher :
ISBN 13 : 9780262560375
Total Pages : 409 pages
Book Rating : 4.5/5 (63 download)

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Book Synopsis NBER Macroeconomics Annual 1986 by :

Download or read book NBER Macroeconomics Annual 1986 written by and published by . This book was released on 1986 with total page 409 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Optimal Unemployment Insurance

Author : Andreas Pollak
Publisher : Mohr Siebeck
ISBN 13 : 9783161493041
Total Pages : 204 pages
Book Rating : 4.4/5 (93 download)

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Book Synopsis Optimal Unemployment Insurance by : Andreas Pollak

Download or read book Optimal Unemployment Insurance written by Andreas Pollak and published by Mohr Siebeck. This book was released on 2007 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt: Designing a good unemployment insurance scheme is a delicate matter. In a system with no or little insurance, households may be subject to a high income risk, whereas excessively generous unemployment insurance systems are known to lead to high unemployment rates and are costly both from a fiscal perspective and for society as a whole. Andreas Pollak investigates what an optimal unemployment insurance system would look like, i.e. a system that constitutes the best possible compromise between income security and incentives to work. Using theoretical economic models and complex numerical simulations, he studies the effects of benefit levels and payment durations on unemployment and welfare. As the models allow for considerable heterogeneity of households, including a history-dependent labor productivity, it is possible to analyze how certain policies affect individuals in a specific age, wealth or skill group. The most important aspect of an unemployment insurance system turns out to be the benefits paid to the long-term unemployed. If this parameter is chosen too high, a large number of households may get caught in a long spell of unemployment with little chance of finding work again. Based on the predictions in these models, the so-called "Hartz IV" labor market reform recently adopted in Germany should have highly favorable effects on the unemployment rates and welfare in the long run.

More Gray, More Volatile? Aging and (Optimal) Monetary Policy

Author : Daniel Baksa
Publisher : International Monetary Fund
ISBN 13 : 151350908X
Total Pages : 46 pages
Book Rating : 4.5/5 (135 download)

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Book Synopsis More Gray, More Volatile? Aging and (Optimal) Monetary Policy by : Daniel Baksa

Download or read book More Gray, More Volatile? Aging and (Optimal) Monetary Policy written by Daniel Baksa and published by International Monetary Fund. This book was released on 2019-09-20 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: The evidence on the inflation impact of aging is mixed, and there is no evidence regarding the volatility of inflation. Based on advanced economies’ data and a DSGE-OLG model, we find that aging leads to downward pressure on inflation and higher inflation volatility. Our paper is also the first, using this framework, to discuss how aging affects the transmission channels of monetary policy. We are also the first to examine aging and optimal central bank policies. As aging redistributes wealth among generations and the labor force becomes more scarce, our model suggests that aging makes monetary policy less effective and in more gray societies central banks should react more strongly to nominal variables.

Designing a Simple Loss Function for Central Banks

Author : Davide Debortoli
Publisher : International Monetary Fund
ISBN 13 : 1484311752
Total Pages : 56 pages
Book Rating : 4.4/5 (843 download)

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Book Synopsis Designing a Simple Loss Function for Central Banks by : Davide Debortoli

Download or read book Designing a Simple Loss Function for Central Banks written by Davide Debortoli and published by International Monetary Fund. This book was released on 2017-07-21 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.

Estimating Trade Elasticities

Author : Jaime Marquez
Publisher : Springer Science & Business Media
ISBN 13 : 1475735367
Total Pages : 147 pages
Book Rating : 4.4/5 (757 download)

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Book Synopsis Estimating Trade Elasticities by : Jaime Marquez

Download or read book Estimating Trade Elasticities written by Jaime Marquez and published by Springer Science & Business Media. This book was released on 2013-03-14 with total page 147 pages. Available in PDF, EPUB and Kindle. Book excerpt: One cannot exaggerate the importance of estimating how international trade responds to changes in income and prices. But there is a tension between whether one should use models that fit the data but that contradict certain aspects of the underlying theory or models that fit the theory but contradict certain aspects of the data. The essays in Estimating Trade Elasticities book offer one practical approach to deal with this tension. The analysis starts with the practical implications of optimising behaviour for estimation and it follows with a re-examination of the puzzling income elasticity for US imports that three decades of studies have not resolved. The analysis then turns to the study of the role of income and prices in determining the expansion in Asian trade, a study largely neglected in fifty years of research. With the new estimates of trade elasticities, the book examines how they assist in restoring the consistency between elasticity estimates and the world trade identity.

The Economics of Growth

Author : Philippe Aghion
Publisher : MIT Press
ISBN 13 : 0262303892
Total Pages : 519 pages
Book Rating : 4.2/5 (623 download)

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Book Synopsis The Economics of Growth by : Philippe Aghion

Download or read book The Economics of Growth written by Philippe Aghion and published by MIT Press. This book was released on 2008-12-19 with total page 519 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive, rigorous, and up-to-date introduction to growth economics that presents all the major growth paradigms and shows how they can be used to analyze the growth process and growth policy design. This comprehensive introduction to economic growth presents the main facts and puzzles about growth, proposes simple methods and models needed to explain these facts, acquaints the reader with the most recent theoretical and empirical developments, and provides tools with which to analyze policy design. The treatment of growth theory is fully accessible to students with a background no more advanced than elementary calculus and probability theory; the reader need not master all the subtleties of dynamic programming and stochastic processes to learn what is essential about such issues as cross-country convergence, the effects of financial development on growth, and the consequences of globalization. The book, which grew out of courses taught by the authors at Harvard and Brown universities, can be used both by advanced undergraduate and graduate students, and as a reference for professional economists in government or international financial organizations. The Economics of Growth first presents the main growth paradigms: the neoclassical model, the AK model, Romer's product variety model, and the Schumpeterian model. The text then builds on the main paradigms to shed light on the dynamic process of growth and development, discussing such topics as club convergence, directed technical change, the transition from Malthusian stagnation to sustained growth, general purpose technologies, and the recent debate over institutions versus human capital as the primary factor in cross-country income differences. Finally, the book focuses on growth policies—analyzing the effects of liberalizing market competition and entry, education policy, trade liberalization, environmental and resource constraints, and stabilization policy—and the methodology of growth policy design. All chapters include literature reviews and problem sets. An appendix covers basic concepts of econometrics.

International Dimensions of Monetary Policy

Author : Jordi Galí
Publisher : University of Chicago Press
ISBN 13 : 0226278875
Total Pages : 663 pages
Book Rating : 4.2/5 (262 download)

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Book Synopsis International Dimensions of Monetary Policy by : Jordi Galí

Download or read book International Dimensions of Monetary Policy written by Jordi Galí and published by University of Chicago Press. This book was released on 2010-03-15 with total page 663 pages. Available in PDF, EPUB and Kindle. Book excerpt: United States monetary policy has traditionally been modeled under the assumption that the domestic economy is immune to international factors and exogenous shocks. Such an assumption is increasingly unrealistic in the age of integrated capital markets, tightened links between national economies, and reduced trading costs. International Dimensions of Monetary Policy brings together fresh research to address the repercussions of the continuing evolution toward globalization for the conduct of monetary policy. In this comprehensive book, the authors examine the real and potential effects of increased openness and exposure to international economic dynamics from a variety of perspectives. Their findings reveal that central banks continue to influence decisively domestic economic outcomes—even inflation—suggesting that international factors may have a limited role in national performance. International Dimensions of Monetary Policy will lead the way in analyzing monetary policy measures in complex economies.

International Macroeconomics in the Wake of the Global Financial Crisis

Author : Laurent Ferrara
Publisher : Springer
ISBN 13 : 3319790757
Total Pages : 300 pages
Book Rating : 4.3/5 (197 download)

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Book Synopsis International Macroeconomics in the Wake of the Global Financial Crisis by : Laurent Ferrara

Download or read book International Macroeconomics in the Wake of the Global Financial Crisis written by Laurent Ferrara and published by Springer. This book was released on 2018-06-13 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book collects selected articles addressing several currently debated issues in the field of international macroeconomics. They focus on the role of the central banks in the debate on how to come to terms with the long-term decline in productivity growth, insufficient aggregate demand, high economic uncertainty and growing inequalities following the global financial crisis. Central banks are of considerable importance in this debate since understanding the sluggishness of the recovery process as well as its implications for the natural interest rate are key to assessing output gaps and the monetary policy stance. The authors argue that a more dynamic domestic and external aggregate demand helps to raise the inflation rate, easing the constraint deriving from the zero lower bound and allowing monetary policy to depart from its current ultra-accommodative position. Beyond macroeconomic factors, the book also discusses a supportive financial environment as a precondition for the rebound of global economic activity, stressing that understanding capital flows is a prerequisite for economic-policy decisions.

Economic Modeling and Inference

Author : Bent Jesper Christensen
Publisher : Princeton University Press
ISBN 13 : 1400833108
Total Pages : 488 pages
Book Rating : 4.4/5 (8 download)

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Book Synopsis Economic Modeling and Inference by : Bent Jesper Christensen

Download or read book Economic Modeling and Inference written by Bent Jesper Christensen and published by Princeton University Press. This book was released on 2021-07-13 with total page 488 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic Modeling and Inference takes econometrics to a new level by demonstrating how to combine modern economic theory with the latest statistical inference methods to get the most out of economic data. This graduate-level textbook draws applications from both microeconomics and macroeconomics, paying special attention to financial and labor economics, with an emphasis throughout on what observations can tell us about stochastic dynamic models of rational optimizing behavior and equilibrium. Bent Jesper Christensen and Nicholas Kiefer show how parameters often thought estimable in applications are not identified even in simple dynamic programming models, and they investigate the roles of extensions, including measurement error, imperfect control, and random utility shocks for inference. When all implications of optimization and equilibrium are imposed in the empirical procedures, the resulting estimation problems are often nonstandard, with the estimators exhibiting nonregular asymptotic behavior such as short-ranked covariance, superconsistency, and non-Gaussianity. Christensen and Kiefer explore these properties in detail, covering areas including job search models of the labor market, asset pricing, option pricing, marketing, and retirement planning. Ideal for researchers and practitioners as well as students, Economic Modeling and Inference uses real-world data to illustrate how to derive the best results using a combination of theory and cutting-edge econometric techniques. Covers identification and estimation of dynamic programming models Treats sources of error--measurement error, random utility, and imperfect control Features financial applications including asset pricing, option pricing, and optimal hedging Describes labor applications including job search, equilibrium search, and retirement Illustrates the wide applicability of the approach using micro, macro, and marketing examples

Financial Markets and the Real Economy

Author : John H. Cochrane
Publisher : Now Publishers Inc
ISBN 13 : 1933019158
Total Pages : 117 pages
Book Rating : 4.9/5 (33 download)

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Book Synopsis Financial Markets and the Real Economy by : John H. Cochrane

Download or read book Financial Markets and the Real Economy written by John H. Cochrane and published by Now Publishers Inc. This book was released on 2005 with total page 117 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial Markets and the Real Economy reviews the current academic literature on the macroeconomics of finance.

Estimating the Value of a Statistical Life

Author : Orley Ashenfelter
Publisher :
ISBN 13 :
Total Pages : 12 pages
Book Rating : 4.3/5 (97 download)

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Book Synopsis Estimating the Value of a Statistical Life by : Orley Ashenfelter

Download or read book Estimating the Value of a Statistical Life written by Orley Ashenfelter and published by . This book was released on 2004 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we show that omitted variables and publication bias lead to severely biased estimates of the value of a statistical life. Although our empirical results are obtained in the context of a study of choices about road safety, we suspect that the same issues plague the estimation of monetary trade-offs regarding safety in other contexts.

Exchange Rate Economics

Author : Ronald MacDonald
Publisher : Routledge
ISBN 13 : 1134838220
Total Pages : 334 pages
Book Rating : 4.1/5 (348 download)

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Book Synopsis Exchange Rate Economics by : Ronald MacDonald

Download or read book Exchange Rate Economics written by Ronald MacDonald and published by Routledge. This book was released on 2005 with total page 334 pages. Available in PDF, EPUB and Kindle. Book excerpt: ''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""

Applied Intertemporal Optimization

Author : Klaus Wälde
Publisher : Klaus Wälde
ISBN 13 : 3000324283
Total Pages : 332 pages
Book Rating : 4.0/5 (3 download)

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Book Synopsis Applied Intertemporal Optimization by : Klaus Wälde

Download or read book Applied Intertemporal Optimization written by Klaus Wälde and published by Klaus Wälde. This book was released on 2012 with total page 332 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Technology Shocks and Aggregate Fluctuations

Author : Mr.Pau Rabanal
Publisher : International Monetary Fund
ISBN 13 : 1451875657
Total Pages : 68 pages
Book Rating : 4.4/5 (518 download)

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Book Synopsis Technology Shocks and Aggregate Fluctuations by : Mr.Pau Rabanal

Download or read book Technology Shocks and Aggregate Fluctuations written by Mr.Pau Rabanal and published by International Monetary Fund. This book was released on 2004-12-01 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.