EconPapers    
Economics at your fingertips  
 

Technology and the Two Margins of Labor Adjustment: A New Keynesian Perspective

Francesco Furlanetto (), Tommy Sveen () and Lutz Weinke
Additional contact information
Lutz Weinke: Humboldt-Universität zu Berlin

No 2018/7, Working Paper from Norges Bank

Abstract: Canova et al. (2010 and 2012) estimate the dynamic response of labor market variables to technological shocks. They show that investment-specifi?c shocks imply almost exclusively an adjustment along the intensive margin (i.e., hours worked), whereas for neutral shocks the largest share of the adjustment takes place along the extensive margin (i.e., employment). In this paper we develop a New Keynesian model featuring capital accumulation, two margins of labor adjustment and a hiring cost. The model is used to analyze a novel economic mechanism to explain that evidence.

Keywords: Technological Shocks; Sticky Prices; Labor Market (search for similar items in EconPapers)
JEL-codes: E22 E24 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mac
Date: 2018-05-15
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.norges-bank.no/en/Published/Papers/Working-Papers/2018/72018/

Related works:
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:bno:worpap:2018_07

Access Statistics for this paper

More papers in Working Paper from Norges Bank Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-10-14
Handle: RePEc:bno:worpap:2018_07