Flexible prices, labor market frictions, and the response of employment to technology shocks

Arbeitspapier

Recent empirical evidence establishes that a positive technology shock leads to a decline in labor inputs. Can a flexible price model enriched with labor market frictions replicate this stylized fact? We develop and estimate a standard flexible price model using Bayesian methods that allows, but does not require, labor market frictions to generate a negative response of employment to a technology shock. We find that labor market frictions account for the fall in labor inputs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2013-16

Classification and Topics

• Classification: Wirtschaft ; Business Fluctuations; Cycles
• Subject: technology shocks ; employment ; labor market frictions

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mandelman, Federico S. ; Zanetti, Francesco
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Atlanta
• (where): Atlanta, GA
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/101001
• Last update: 10.03.2025, 11:42 AM CET