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Can Intangible Capital Explain Cyclical Movements in the Labor Wedge? / Francois Gourio, Leena Rudanko.
- Format:
- Book
- Author/Creator:
- Gourio, Francois.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w19900.
- NBER working paper series no. w19900
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- Intangible capital is an important factor of production in modern economies that is generally neglected in business cycle analyses. We demonstrate that intangible capital can have a substantial impact on business cycle dynamics, especially if the intangible is complementary with production capacity. We focus on customer capital: the capital embodied in the relationships a firm has with its customers. Introducing customer capital into a standard real business cycle model generates a volatile and countercyclical labor wedge, due to a mismeasured marginal product of labor. We also provide new evidence on cyclical variation in selling effort to discipline the exercise.
- Notes:
- Print version record
- February 2014.
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