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Madeira, J. (2018). Assessing the empirical relevance of labour frictions to business cycle fluctuations. Oxford Bulletin of Economics and Statistics. 80 (3), 554-574
J. A. Madeira, "Assessing the empirical relevance of labour frictions to business cycle fluctuations", in Oxford Bulletin of Economics and Statistics, vol. 80, no. 3, pp. 554-574, 2018
@article{madeira2018_1716198741431, author = "Madeira, J.", title = "Assessing the empirical relevance of labour frictions to business cycle fluctuations", journal = "Oxford Bulletin of Economics and Statistics", year = "2018", volume = "80", number = "3", doi = "10.1111/obes.12215", pages = "554-574", url = "https://onlinelibrary.wiley.com/journal/14680084" }
TY - JOUR TI - Assessing the empirical relevance of labour frictions to business cycle fluctuations T2 - Oxford Bulletin of Economics and Statistics VL - 80 IS - 3 AU - Madeira, J. PY - 2018 SP - 554-574 SN - 0305-9049 DO - 10.1111/obes.12215 UR - https://onlinelibrary.wiley.com/journal/14680084 AB - This paper describes a dynamic stochastic general equilibrium model augmented with labour frictions, namely: indivisible labour, predetermined employment and adjustment costs. This improves the fit to the data as shown by a higher log marginal likelihood and closer match to key business cycle statistics. The labour frictions introduced are relevant for model dynamics and economic policy: the effect of total factor productivity shocks on most macroeconomic variables is substantially mitigated; fiscal policy leads to a greater crowding out of private sector activity and monetary policy has a lower impact on output. Labour frictions also provide a better match to impulse response functions from vector autoregressive models. ER -