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Unemployment and Productivity in the Long Run : the Role of Macroeconomic Volatility / Paolo Surico, Luca Ricci, Pierpaolo Benigno.
- Format:
- Book
- Government document
- Author/Creator:
- Surico, Paolo.
- Series:
- IMF Working Papers; Working Paper ; No. 2010/259
- IMF Working Papers
- Language:
- English
- Subjects (All):
- Unemployment.
- Industrial productivity.
- Macroeconomics.
- Physical Description:
- 1 online resource (70 p.)
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2010.
- Language Note:
- English
- Summary:
- We propose a theory of low-frequency movements in unemployment based on asymmetric real wage rigidities. The theory generates two main predictions: long-run unemployment increases with (i) a fall in long-run productivity growth and (ii) a rise in the variance of productivity growth. Evidence based on U.S. time series and on an international panel strongly supports these predictions. The empirical specifications featuring the variance of productivity growth can account for two U.S. episodes which a linear model based only on long-run productivity growth cannot fully explain. These are the decline in long-run unemployment over the 1980s and its rise during the late 2000s.
- Contents:
- Cover Page; Title Page; Copyright Page; Contents; 1. Introduction; Figure 1; 2. The Model; 2.1. Flexible wages; 2.2 Definition of unemployment rate; 2.3 Sticky real wages; 2.3.1 The productivity growth-unemployment trade-off; Figure 2; Figure 3; 2.4 Downward real wage rigidity; 2.4.1 The productivity growth-unemployment trade-off; Figure 4; 3. Evidence for the United States; 3.1 Measuring unemployment and productivity trends; 3.2 The fit of the linear model; Figure 5; 3.3 Controlling for demographics; Table 1. Controlling for demographics; 3.4 The fit of the nonlinear model; Figure 6
- 4. International evidenceTable 2. Panel regressions; 5. Conclusions; A. The data; Figure 7; Figure 8; B. A stochastic volatility model; C. Convergence; Figure 9; D. The asymmetric real-wage rigidity model; E. The downward real-wage rigidity model; References; Footnotes
- Notes:
- "November 2010."
- Includes bibliographical references.
- Description based on print version record.
- ISBN:
- 9786613879080
- 9781462366828
- 1462366821
- 9781455256891
- 1455256897
- 9781283566636
- 128356663X
- 9781455216864
- 1455216860
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