Aggregate Employment Fluctuations with Microeconomic Asymmetries / Jeffrey R. Campbell, Jonas D.M. Fisher.

Format:

Book

Author/Creator:

Campbell, Jeffrey R.

Contributor:

National Bureau of Economic Research.

Fisher, Jonas D.M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5767.

NBER working paper series no. w5767

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

We provide a simple explanation for the observation that the variance of job destruction is greater than the variance of job creation: job creation is costlier at the margin than job destruction. As Caballero [2] has argued, asymmetric employment adjustment costs at the establishment level need not imply asymmetric volatility of aggregate job flows. We construct an equilibrium model in which (S,s)-type employment policies respond endogenously to aggregate shocks. The microeconomic asymmetries in the model can dampen the response of total job creation to an aggregate shock and cause it to be less volatile than total job destruction. This is so even though aggregate shocks are symmetrically distributed.

Notes:

Print version record

September 1996.