 A New Model of Labor Dynamics: Ultrametrics, Okun's Law, and Transient DynamicsMasanao Aoki and
Hiroshi Yoshikawa
A chapter in Nonlinear Dynamics and Heterogeneous Interacting Agents, 2005, pp 203-219 from Springer Abstract: Summary This paper adds a labor sector to the model of output fluctuations of Aoki (2002, Chapt. 8), and Aoki and Yoshikawa (2003) to produce a new model with a labor sector. The concept of ultrametrics is introduced to the labor dynamics of this paper to measure ”distances” between clusters of unemployed workers in different geographical locations, with work experiences, and/or human capitals to reflect differences in probabilities of them being rehired from a pool of unemployed workers. We maintain the assumption of our previous model that marginal product of labor does not equalize instantaneously across sectors of our economy. This model shares the same property with our earlier one that GDP responds to changes in demand patterns among the sectors. In addition, the model of this paper exhibits a relation between unemployment rates and GDP similar to that of the Okuns' law in its business cycle fluctuations. This Okun's coefficient increases as the average GDP increases. Our model also reaches stationary business cycles faster as more demands are put on more productive sectors of the model. Date: 2005 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-540-27296-0_14 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Lecture Notes in Economics and Mathematical Systems from Springer |
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