Artikel

Labour market fluctuations: An RBC model for emerging countries

In this paper, we examine the labour market properties of business cycle fluctuations for a group of 15 emerging market economies (EMEs) and the US using annual data from 1970 to 2013. We find that on average, the hours worked and employment volatility (relative to output volatility) are lower, while the volatility of productivity and wages are 2–3 times higher in EMEs compared to the US. We then assess the performance of a standard RBC model and an augmented RBC model with capacity utilization, investment adjustment cost and indivisible labour with temporary and permanent productivity shocks to explain labour market facts observed in the data. We find that these models fail to explain labour market fluctuations in the business cycles of these countries, but the model with investment adjustment cost improves the performance of relative volatility of wages and hours, as well as the cyclicality of hours, compared to the standard RBC model. Lastly, we investigate the cyclical properties of the labour wedge and find that the total labour wedge (relative to output volatility) is more volatile over the business cycle in emerging economies (1.72) compared to the US (0.95). Further, fluctuations in the total labour wedge reflect the ones in the household component rather than the firm component of the wedge in EMEs and the US.

Sprache
Englisch

Erschienen in
Journal: Central Bank Review (CBR) ; ISSN: 1303-0701 ; Volume: 19 ; Year: 2019 ; Issue: 4 ; Pages: 141-153 ; Amsterdam: Elsevier

Klassifikation
Wirtschaft
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
Monetary Policy
Open Economy Macroeconomics
Economywide Country Studies: General
Thema
Labour market
Emerging market economies
Real business cycle model
Labour wedge

Ereignis
Geistige Schöpfung
(wer)
Coskun, Sevgi
Ereignis
Veröffentlichung
(wer)
Elsevier
(wo)
Amsterdam
(wann)
2019

DOI
doi:10.1016/j.cbrev.2019.11.002
Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

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Objekttyp

  • Artikel

Beteiligte

  • Coskun, Sevgi
  • Elsevier

Entstanden

  • 2019

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