RBC Models and the Hours-Wages Puzzle: Puzzle Solved!
Aleksandar Vasilev
EconStor Preprints from ZBW - Leibniz Information Centre for Economics
Abstract:
This paper shows that a modified real business cycle (RBC) model, one that includes home production and fiscal spending shocks, can solve one of the RBC puzzles and generates zero correlation between wages and hours. In addition, the micro-founded model presented here provides a sound theoretical model to analyze fiscal policy in a neoclassical framework and is able to capture many aspects of the data that the benchmark RBC model was missing.
Keywords: fiscal policy; home production; government spending shock; indivisible labor (search for similar items in EconPapers)
JEL-codes: C63 E32 E62 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-dge, nep-ger and nep-mac
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https://www.econstor.eu/bitstream/10419/142466/1/warsaw.pdf (application/pdf)
Related works:
Journal Article: RBC Models and the Hours-Wages Puzzle: Puzzle Solved! (2015) 
Journal Article: RBC Models and the Hours-Wages Puzzle: Puzzle Solved! (2015) 
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:142466
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