How important are shocks to the elasticity of aggregate labor supply for business cycle fluctuations?

Arbeitspapier

Stochastic shocks to aggregate labor supply elasticity are introduced into a real-business-cycle setup augmented with a detailed government sector. The model is calibrated to Bulgarian data for the period following the introduction of the currency board arrange-ment (1999-2018). The quantitative importance of a stochastic aggregate labor supply elasticity parameter is investigated for the magnitude of the cyclical fluctuations in Bulgaria. The quantitative effect of such a stochasticity increases the variability of hours, and lowers the correlation between hours and wages, and thus is found to be quantitatively important for the labor market aspect of business cycles.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EERI Research Paper Series ; No. 08/2022

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Business Fluctuations; Cycles
• Subject: Business cycles ; stochastic aggregate labor supply elasticity ; Bulgaria

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vasilev, Aleksandar
• Event: Veröffentlichung
• (who): Economics and Econometrics Research Institute (EERI)
• (where): Brussels
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/273052
• Last update: 10.03.2025, 11:41 AM CET