Author: Gerard A. PfannPublisher:
ISBN:
Category : Employment (Economic theory)
Languages : en
Pages : 46
Book Description
Employment and Business Cycle Asymmetries
Author: Gerard A. PfannPublisher:
ISBN:
Category : Employment (Economic theory)
Languages : en
Pages : 46
Book Description
Business Cycle Asymmetries and the Labor Market
Author: Britta KohlbrecherPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
This paper shows that a search and matching model with idiosyncratic training cost shocks can explain the asymmetric movement of the job-finding rate over the business cycle and the decline of matching efficiency in recessions. Large negative aggregate shocks move the hiring cutoff into a part of the training cost distribution with higher density. The position of the hiring cutoff in the distribution is disciplined by the empirical elasticity of the job-finding rate with respect to market tightness. Our model explains a large fraction of the matching efficiency decline during the Great Recession and generates state-dependent effects of policy interventions.
Hysteresis and Business Cycles
Author: Ms.Valerie CerraPublisher: International Monetary Fund
ISBN: 1513536990
Category : Business & Economics
Languages : en
Pages : 50
Book Description
Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
The Scarring Effect of Asymmetric Business Cycles
Author: Domenico FerraroPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Business cycle fluctuations in the U.S. employment-to-population ratio are asymmetric: deviations below trend (troughs) are larger than deviations above trend (peaks). This asymmetry has a "scarring effect," which reduces the average level of the employment-to-population ratio around which the economy fluctuates. To quantify such a scar, we formulate an equilibrium business cycle model featuring frictional unemployment and a labor force participation choice that produces the observed labor market asymmetry in the face of symmetric business cycle shocks. We quantify that the employment-to-population ratio would be 0.3 percentage points higher in the absence of cyclical fluctuations. Further, by dampening business cycles, counter-cyclical stabilization policy reduces the job loss by 70%.
Asymmetric Labor Market Flows Over the Business Cycle
Author: Ronald SchettkatPublisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 38
Book Description
The American Business Cycle
Author: Robert J. GordonPublisher: University of Chicago Press
ISBN: 0226304590
Category : Business & Economics
Languages : en
Pages : 882
Book Description
In recent decades the American economy has experienced the worst peace-time inflation in its history and the highest unemployment rate since the Great Depression. These circumstances have prompted renewed interest in the concept of business cycles, which Joseph Schumpeter suggested are "like the beat of the heart, of the essence of the organism that displays them." In The American Business Cycle, some of the most prominent macroeconomics in the United States focuses on the questions, To what extent are business cycles propelled by external shocks? How have post-1946 cycles differed from earlier cycles? And, what are the major factors that contribute to business cycles? They extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations. Seven papers address specific aspects of economic activity: consumption, investment, inventory change, fiscal policy, monetary behavior, open economy, and the labor market. Five papers focus on aggregate economic activity. In a number of cases, the papers present findings that challenge widely accepted models and assumptions. In addition to its substantive findings, The American Business Cycle includes an appendix containing both the first published history of the NBER business-cycle dating chronology and many previously unpublished historical data series.
Is Business Cycle Asymmetry Intrinsic in Industrialized Economies?
Author: James MorleyPublisher:
ISBN:
Category :
Languages : en
Pages : 58
Book Description
We consider a model-averaged forecast-based estimate of the output gap to measure economic slack in ten industrialized economies. Our measure takes changes in the long-run growth rate into account and, by addressing model uncertainty using equal weights on different forecast-based estimates, is robust to different assumptions about the underlying structure of the economy. For all ten countries in the sample, we find that the estimated output gap has much larger negative movements during recessions than positive movements in expansions, suggesting business cycle asymmetry is an intrinsic characteristic of industrialized economies. Furthermore, the estimated output gap is always strongly negatively correlated with future output growth and unemployment and positively correlated with capacity utilization. It also implies a convex Phillips Curve in many cases. The model-averaged output gap is reliable in real time in the sense of being subject to relatively small revisions.
Business Cycle Fluctuations and Economic Policy
Author: Khurshid M. KianiPublisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 134
Book Description
This book highlights the importance of studying similarity of business cycles across countries and answers the theoretical question about the behaviour of fluctuations in economic activity over different phases of business cycles. This is done by analysing cross-country data that provides sufficient empirical justifications on the behaviour of economic activity to conclude that business cycles are alike. Further, the book maintains, from the recent empirical research, that business cycles fluctuations are asymmetric. For empirical validation of the hypothesis that business cycles are asymmetric at least in the group of seven highly developed industrialised (G7) countries, real GDP growth rates from these countries are analysed using non-linear time series and switching time series models as well as in-sample and jack-knife out-of-sample forecasts from neural networks. While importance and application of non-linear and switching time series models are employed for testing possible existence of business cycle asymmetries in all the series after taking into account long memory, conditional heteroskedasticity, and time varying volatility in the series, usefulness of non-parametric techniques such as artificial neural networks forecasts are discussed and empirically tested to conclude that forecasts from neural networks are superior to the selected time series models. Additionally, the book presents a robust evidence of business cycle asymmetries in G7 countries, which is indeed, the answer to the basic research question on the behaviour of economic fluctuation over the business cycles. The book compares spill over and contagion effects due to business cycle fluctuations within the countries studied. In addition, having known the type of business cycle asymmetries, policy makers, empirical researchers, and forecasters would be able to employ appropriate forecasting models for forecasting impact of monetary policy or any other shock on the economies of these countries.
Business Cycle Asymmetry and the Stock Market
Author: Paramsothy SilvapullePublisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 40
Book Description
Author: Domenico Ferraro