Unemployment and Productivity in the Long Run: The Role of Macroeconomic Volatility

Pierpaolo Benigno, Luca Ricci and Paolo Surico

The Review of Economics and Statistics, 2015, vol. 97, issue 3, 698-709

Abstract: This paper presents a new empirical regularity between the volatility of productivity growth and long-run unemployment for a given level of long-run productivity growth. A theoretical framework based on asymmetric real wage rigidities is shown to have the potential to rationalize this finding. The model tends to fit U.S. long-run unemployment better than a specification based on long-run productivity growth only, especially during the Great Moderation and the Great Recession.

Keywords: volatility; employment; productivity growth; long-run unemployment; great moderation; great recession; unemployment (search for similar items in EconPapers)
JEL-codes: E0 E20 E40 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (40)

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Related works:
Working Paper: Unemployment and productivity in the long run: The role of macroeconomic volatility (2011)
Working Paper: Unemployment and Productivity in the Long Run: the Role of Macroeconomic Volatility (2010)
Working Paper: Unemployment and Productivity in the Long Run: the Role of Macroeconomic Volatility (2010)
Working Paper: Unemployment and Productivity in the Long Run: The Role of Macroeconomic Volatility (2010)
Working Paper: Unemployment and productivity in long-run: the role of macroeconomic volatility
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