| Description |
1 online resource (46 pages) |
| Series |
IMF Working Papers, 1018-5941 ; WP/17/131 |
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IMF working paper ; WP/17/131.
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| Contents |
Cover; Contents; I Introduction; II Related Literature; III The Model; A Households; B Production; C Wage Determination; D Closing the Model and Competitive Equilibrium; IV Background for Simulation Analysis; A Stochastic Processes; B Functional Forms and Parameter Selection; V Results; A Contour Analysis; B Statistical Analysis; VI Driving Forces Behind Benchmark Results; A Impulse Response Function Analysis; 1 Negative Aggregate TFP Shock; 2 Negative Aggregate Financial Shock; B Wages and Consumption: TFP v. Financial Shocks; VII Conclusions; List of Tables; 1 Statistics: 1985:Q1-2015:Q2 |
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2 Additional statistics: 1990:Q2-2013:Q3 and 2001:Q1-2015:Q2List of Figures; 1 Cyclical Dynamics of the Unemployment Rate, Net Quits, Private Consumption and GDP; 2 TFP Shocks; 3 Cyclical Dynamics of Output; 4 Cyclical Dynamics of Consumption; 5 Cyclical Dynamics of Investment; 6 Cyclical Dynamics of Unemployment; 7 Cyclical Dynamics of the v / u; 8 Cyclical Dynamics of Labor; 9 Cyclical Dynamics of Net Quits; 10 Impulse Response Functions to a 1-standard Deviation Negative TFP Shock; 11 Impulse Response Functions to a 1-standard Deviation Negative Financial Shock |
| Summary |
Amid total factor productivity (TFP) shocks job-to-job flows amplify the volatility of unemployment, but the aggregate implications of job-to-job flows amid financial shocks are less understood. To develop such understanding we model a general equilibrium labor-search framework that incorporates on-the-job (OTJ) search and distinctly accounts for the differential impact of TFP and financial shocks. Surprisingly, we find that the interaction of OTJ search with financial shocks is sufficiently different from its interaction with TFP shocks so that, under standard calibrations, our model generates aggregate dynamics exceedingly in line with the behavior of key U.S. macro data across several decades and in the wake of the Global Financial Crisis as well. Importantly, as in the data, the model yields relatively high volatilities of consumption, labor income, and unemployment. As such, our work contributes to resolving two limitations of current general equilibrium labor-search theory: under standard calibrations models without OTJ search generate implausibly low unemployment volatility, while models with OTJ search generate unemployment volatility closer to the data but at the expense of implausibly low consumption and labor-income volatility |
| Notes |
Print version record |
| Form |
Electronic book
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| Author |
Shapiro, Alan Finkelstein, author.
|
|
González Gómez, Andrés, author.
|
| ISBN |
9781484304082 |
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148430408X |
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1475595867 |
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9781475595864 |
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