Author: Thomas Coleman Publisher: ISBN: Category : Languages : en Pages : 49
Book Description
This paper develops an multi-state optimizing model of individual labor supply that concentrates on all-or-nothing employment decisions. This model views individual behavior in the labor market as a process of moving between labor force activities (employed, unemployed, and not-in-the-labor-force). Agents are in a stochastic environment and make decisions whether they want to work or not. When an agent decides they want to work, however, they must search for a job. Jobs at the going wage cannot be found immediately, and an agent must spend time and (possibly) money looking for a firm with an available job. The probability of finding an available job in the next instant, if less than unity, acts as a constraint on labor supply; a worker would work at the current wage but is unable to do so because jobs are not instantaneously available. This is a formal model of frictional unemployment, although one could also label such unemployment involuntary. This model is closely related to the analysis of the duration of unemployment. (See, e.g. Kaitz, 1970; Salant, 1977; Nickell, 1979; Heckman and Singer, 1984a, 1984b.) Other models that deal with employment versus non-employment decisions are Lippman and McCall (1976); Toikka (1976); Burdett and Mortensen (1978a, 1978b).
Author: Sangyup Choi Publisher: International Monetary Fund ISBN: 1498356303 Category : Business & Economics Languages : en Pages : 26
Book Description
We study the role of uncertainty shocks in explaining unemployment dynamics, separating out the role of aggregate and sectoral channels. Using S&P500 data from the first quarter of 1957 to third quarter of 2014, we construct separate indices to measure aggregate and sectoral uncertainty and compare their effects on the unemployment rate in a standard macroeconomic vector autoregressive (VAR) model. We find that aggregate uncertainty leads to an immediate increase in unemployment, with the impact dissipating within a year. In contrast, sectoral uncertainty has a long-lived impact on unemployment, with the peak impact occurring after two years. The results are consistent with a view that the impact of aggregate uncertainty occurs through a “wait-and-see” mechanism while increased sectoral uncertainty raises unemployment by requiring greater reallocation across sectors.
Author: Fabio-Cesare Bagliano Publisher: OUP Oxford ISBN: 0191532932 Category : Business & Economics Languages : en Pages : 296
Book Description
Dynamic Approaches to Macroeconomics provides the advanced student with key methodological tools for the dynamic analysis of a core selection of macroeconomic phenomena, including consumption and investment choices, employment and unemployment outcomes, and economic growth. The technical treatment of these tools will enable the student to handle current journal literature, while not assuming any particular familiarity with advanced analytical tools or mathematical notions. As these tools are introduced, they are related to particular applications to illustrate their use. Chapters are linked by various formal and substantive threads. Discrete-time optimization under uncertainty, introduced in Chapter 1, is motivated and discussed by applications to consumption theory, with particular attention to empirical implementation. Chapter 2 focuses on continuous-time optimization techniques, and discusses the relevant insights in the context of partial-equilibrium investment models. Chapter 3 revisits many of the previous chapters' formal derivations with applications to dynamic labour demand, in comparison to optimal investment models, and characterizes labor market equilibrium when not only individual firms' labor demand, but also individual labor supply by workers, is subject to adjustment costs. Chapter 4 proposes broader applications of methods introduced in the previous chapters and studies continuous-time equilibrium dynamics of representative agent economies, featuring both consumption and investment choices, with applications to long-run growth frameworks of analysis. Chapter 5 illustrates the role of decentralized trading in determining aggregate equilibria, and characterizes aggregate labor market dynamics in the presence of frictional unemployment. Chapters 4 and 5 pay particular attention to strategic interactions and externalities: even when each agent correctly solves his or her individual dynamic problem, modern microfounded macroeconomic models recognize that macroeconomic equilibrium need not have unambiguously desirable properties. By bridging the gap between undergraduate economics and modern microfounded macroeconomic research, this book will be of interest to graduate students in economics, and as a technical reference for economic researchers.
Author: Thomas Coleman
Author: Jisoon Lee
Author: Robert F. Cotterman
Author: Sangyup Choi
Author: C. J. McKenna
Author: Michael B. Ormiston
Author: Fabio-Cesare Bagliano
Author: James Joseph Heckman
Author: Thomas E. MaCurdy
Author: Kenneth Burdett