Technology and the Two Margins of Labor Adjustment: A New Keynesian Perspective

Arbeitspapier

Canova et al. (2010 and 2012) estimate the dynamic response of labor market variables to technological shocks. They show that investment-speci c shocks imply almost exclusively an adjustment along the intensive margin (i.e., hours worked), whereas for neutral shocks the largest share of the adjustment takes place along the extensive margin (i.e., employment). In this paper we develop a New Keynesian model featuring capital accumulation, two margins of labor adjustment and a hiring cost. The model is used to analyze a novel economic mechanism to explain that evidence.

Object Details

• ISBN: 978-82-8379-044-3
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 7/2018

Classification and Topics

• Classification: Wirtschaft ; Investment; Capital; Intangible Capital; Capacity ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Business Fluctuations; Cycles
• Subject: technological shocks ; sticky prices ; labor market

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Furlanetto, Francesco ; Sveen, Tommy ; Weinke, Lutz
• Event: Veröffentlichung
• (who): Norges Bank
• (where): Oslo
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/210143
• Last update: 10.03.2025, 11:45 AM CET