Firing costs and business cycle fluctuations

Marcelo Veracierto

No WP-03-29, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: This paper evaluates to what extent the introduction of firing costs can affect the aggregate dynamics of a neoclassical growth model with heterogeneous establishments. Similarly to the previous literature, firing costs are found to have large steady-state effects. However, they have no important effects on business cycle dynamics: Aggregate employment fluctuations are somewhat smaller when the firing costs are introduced, but most of the effects turn out to be insignificant.

Keywords: Business; cycles (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: FIRING COSTS AND BUSINESS CYCLE FLUCTUATIONS (2008)
Working Paper: Firing Costs and Business Cycle Fluctuations (2004)
Working Paper: Firing Costs and Business Cycle Fluctuations (2004)
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