Hours and employment variation in business cycle theory

Finn Kydland and Edward Prescott

No 17, Discussion Paper / Institute for Empirical Macroeconomics from Federal Reserve Bank of Minneapolis

Abstract: Previous business cycle models have made the assumption that all the variation in the labor input is either due to changes in hours per worker or changes in number of workers, but not both. In this paper, both vary. We think this a better model for estimating the contribution of Solow technology shocks to aggregate fluctuations. We find that about 70 percent of U.S. postwar cyclical fluctuations are induced by variations in the Solow technology parameter.

Keywords: Business cycles; Employment (Economic theory) (search for similar items in EconPapers)
Date: 1989
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Citations: View citations in EconPapers (10)

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Related works:
Chapter: Hours and Employment Variation in Business-Cycle Theory (1991)
Journal Article: Hours and Employment Variation in Business Cycle Theory (1991)
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