A Stock-Flow Accounting Model of the Labor Market: An Application to Israel

Yossi Yakhin () and Natalya Presman

No 2015/058, IMF Working Papers from International Monetary Fund

Abstract: The paper utilizes a theoretical stock-flow accounting model of the labor market, similar to Blanchard and Diamond (1989). Identifying restrictions are derived from the theoretical model and are imposed on a SVAR system. The estimation allows for decomposing fluctuations to their cyclical and structural components. The model is applied to the Israeli economy. The estimates suggest that non-cyclical factors account for at least half of the decline of the unemployment rate during the period between 2004-Q1, when unemployment peaked at 10.9 percent, and 2011-Q4, when it marked a trough at 5.4 percent; suggesting a shift inward of the Beveridge curve.

Keywords: WP; Structural unemployment; Beveridge curve; SVAR with sign restrictions; result unemployment; beneits result; unemployment rise; unemployment variation; time series; vacancies in response; job destruction parameter; Unemployment; Labor force; Labor supply; Unemployment rate; Labor markets; Global (search for similar items in EconPapers)
Pages: 54
Date: 2015-03-16
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Citations: View citations in EconPapers (1)

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Working Paper: A Flow-Accounting Model of the Labor Market: An Application to Israel (2013)
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