On the transmission of us uncertainty shocks to the European labor market

Michel de Souza ()
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Michel de Souza: Federal University of Jequitinhonha and Mucuri Valleys

Economics Bulletin, 2023, vol. 43, issue 4, 1666 - 1679

Abstract: We investigate the effects of a United States uncertainty shock on the European Union labor market by proposing a two-country Dynamic Stochastic General Equilibrium (DSGE) model with search and matching frictions and comparing the impulse response functions with data from twelve economies in a Bayesian Global Vector Autoregression (BGVAR) framework. Our results indicate that the Euro response is similar to a negative aggregate demand shock in the first eighteen months. However, afterward, the labor market frictions and trade intensity drive a stagflation process.

Keywords: Uncertainty; Labor; Trade (search for similar items in EconPapers)
JEL-codes: D8 E2 (search for similar items in EconPapers)
Date: 2023-12-30
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