Abstract
Standard RBC models do not enable one to reproduce main labor market stylized facts : employment is more variable than productivity and labor productivity leads employment fluctuations. Moreover, these models rely on an exogenous Solow residual which is necessary to reproduce economic fluctuations. In order to match cyclical labor market features of French and US economies, we consider a model with indivisible labor, labor hoarding and adjustment costs. The model also explains how the naive Solow residual is affected by government spending shocks.
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Fairise, X., Langot, F. (1995). A RBC Model for Explaining Cyclical Labor Market Features. In: Henin, PY. (eds) Advances in Business Cycle Research. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-57817-5_3
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DOI: https://doi.org/10.1007/978-3-642-57817-5_3
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