Arbeitspapier
Italian labour frictions and wage rigidities in an estimated DSGE
This paper investigates how Italian labour market institutions influence business cycle fluctuations. We apply a DSGE model that features Italian labour market rigidities and we estimate the latter on Italian data using Bayesian techniques to assess the effects of demand, supply, and labour market shocks on the macroeconomy, and to measure their significance for economic fluctuations. Our results show: First, technology, time preference and wage bargaining shocks are key drivers of economic fluctuations across horizons. Second, matching efficiency and wage bargaining shocks are significant sources of unemployment and vacancies fluctuations but their role is limited for output fluctuations. Third, labour market relaxation policies have only marginally contributed to the reduction in unemployment. Last, accounting for wage rigidities influences labour market dynamics and helps the model to fit data well. We, therefore, urge policymakers to support additional changes in labour market institutions.
- Language
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Englisch
- Bibliographic citation
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Series: Document de travail ; No. 2021-07
- Classification
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Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Business Fluctuations; Cycles
Model Construction and Estimation
Model Evaluation, Validation, and Selection
- Subject
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DSGE
Labour market frictions
Bayesian estimation
Italy
- Event
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Geistige Schöpfung
- (who)
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Diwambuena, Josué
Fonseca, Raquel
Schubert, Stefan Franz
- Event
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Veröffentlichung
- (who)
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Université du Québec à Montréal, École des sciences de la gestion (ESG UQAM), Département des sciences économiques
- (where)
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Montréal
- (when)
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2021
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Diwambuena, Josué
- Fonseca, Raquel
- Schubert, Stefan Franz
- Université du Québec à Montréal, École des sciences de la gestion (ESG UQAM), Département des sciences économiques
Time of origin
- 2021
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