Arbeitspapier

Firm Entry, Endogenous Markups and the Dynamics of the Labor Share

Recent U.S. evidence suggests that the response of the labor share to a productivity shock is characterized by countercyclicality and overshooting. These findings cannot be easily reconciled with existing business cycle models. We extend the standard model of search and matching in the labor market by considering strategic interactions among an endogenous number of producers. This leads to countercyclical price markups. While Nash bargaining is sufficient to capture the labor share countercyclicality, we show that countercyclical markups are key to address the overshooting.

Sprache
Englisch

Erschienen in
Series: Quaderni di Dipartimento ; No. 168

Klassifikation
Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Business Fluctuations; Cycles
Production, Pricing, and Market Structure; Size Distribution of Firms
Thema
Endogenous Market Structures
Oligopolistic Competition
Firms' Entry
Search and Matching Frictions
Labor Share Overshooting

Ereignis
Geistige Schöpfung
(wer)
Colciago, Andrea
Rossi, Lorenza
Ereignis
Veröffentlichung
(wer)
Università degli Studi di Pavia, Dipartimento di Economia Politica e Metodi Quantitativi (EPMQ)
(wo)
Pavia
(wann)
2012

Handle
Letzte Aktualisierung
12.07.2024, 13:22 MESZ

Objekttyp

  • Arbeitspapier

Beteiligte

  • Colciago, Andrea
  • Rossi, Lorenza
  • Università degli Studi di Pavia, Dipartimento di Economia Politica e Metodi Quantitativi (EPMQ)

Entstanden

  • 2012

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