Expected inflation, sunspots equilibria and persistent unemployment fluctuations

Arbeitspapier

We propose and estimate a model where unemployment fluctuations result from self-fulfilling changes in expected inflation (sunspot shocks) affecting nominal wage bargaining. Since the estimated parameters fall near the locus of Hopf bifurcations, country-specific expected inflation shocks can replicate the strong persistence and heterogeneity observed in European unemployment rates. They also generate positive comovements in macroeconomic variables and a large relative volatility of consumption. All these features, hardly accounted for by standard sunspot-driven models, are explained here by the fact that liquidity constrained workers, facing earnings uncertainty in the context of imperfect unemployment insurance, choose to consume their current income.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 4302

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Mobility, Unemployment, Vacancies, and Immigrant Workers: General ; Business Fluctuations; Cycles ; Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications
• Thema: Unemployment fluctuations ; sunspots equilibria ; expected inflation ; wage bargaining ; Arbeitslosigkeit ; Volatilität ; Hysteresis ; Inflationserwartung ; Sunspot ; Lohnverhandlungen ; Theorie ; Schätzung ; EU-Staaten

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Dufourt, Frédéric ; Lloyd-Braga, Teresa ; Modesto, Leonor
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/35911
• URN: urn:nbn:de:101:1-20090825106
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ