RBC Models and the Hours-Wages Puzzle: Puzzle Solved!

Aleksandar Vasilev

Ekonomia journal, 2015, vol. 41

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)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://ekonomia.wne.uw.edu.pl/ekonomia/getFile/764 (application/pdf)
no

Related works:
Journal Article: RBC Models and the Hours-Wages Puzzle: Puzzle Solved! (2015)
Working Paper: RBC Models and the Hours-Wages Puzzle: Puzzle Solved! (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eko:ekoeko:41_117

DOI: 10.17451/eko/41/2015/108

Access Statistics for this article

More articles in Ekonomia journal from Faculty of Economic Sciences, University of Warsaw Contact information at EDIRC.
Bibliographic data for series maintained by ().