Wealth effects and cross-country co-movement of labor

Quoc Hung Nguyen

Economics Bulletin, 2011, vol. 31, issue 2, 1362-1371

Abstract: This paper quantitatively shows that the wealth effect on leisure plays a determining role in generating negative co-movement of employment across countries. Hence, even without restrictions on international capital mobility, a positive cross-country correlation of labor can be obtained by simply incorporating into standard models preferences that rule out the wealth effect.

Keywords: International Business Cycles; Wealth Effects; GHH Preferences (search for similar items in EconPapers)
JEL-codes: E3 F4 (search for similar items in EconPapers)
Date: 2011-05-12
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Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-11-00045

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