Labor markets and business cycles / Robert Shimer.

Format:

Book

Author/Creator:

Shimer, Robert.

Series:

CREI lectures in macroeconomics.

CREI lectures in macroeconomics

Language:

English

Subjects (All):

Labor market.

Business cycles.

Physical Description:

1 online resource (189 p.)

Edition:

Course Book

Place of Publication:

Princeton, NJ : Princeton University Press, c2010.

Language Note:

English

Summary:

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.

Contents:

Frontmatter

Contents

Introduction / Voth, Hans-Joachim / Ciccone, Antonio / Galí, Jordi / Ventura, Jaume

Preface

1. The Labor Wedge

2. Benchmark Search Model: Neutrality

3. Real Effects of Productivity Shocks

4. Rigid Wages

5. Looking Ahead

Appendix A. Data

References

Author Index

Notes:

Description based upon print version of record.

Includes bibliographical references and index.

ISBN:

9786612607516

9781282607514

1282607510

9781400835232

1400835232

OCLC:

638860605