Inter-sectoral Labor Immobility, Sectoral Co-movement, and News Shocks

Munechika Katayama and Kwang Hwan Kim

Discussion papers from Graduate School of Economics , Kyoto University

Abstract: The sectoral co-movement of output and hours worked is a prominent feature of business cycle data. However, most two-sector neoclassical models fail to generate this sectoral comovement. We construct and estimate a two-sector neoclassical DSGE model that generates the sectoral co-movement in response to both anticipated and unanticipated shocks. The key to our model’s success is a significant degree of inter-sectoral labor immobility, which we estimate using data on sectoral hours worked. Furthermore, we demonstrate that imperfect inter-sectoral labor mobility provides a better explanation for the sectoral co-movement than some alternative model emphasizing the role of labor-supply wealth e?ects.

Keywords: Sectoral Co-movement; Labor Immobility; Non-separable Preferences; Unanticipated; Shocks; News Shocks. (search for similar items in EconPapers)
JEL-codes: E13 E32 (search for similar items in EconPapers)
Pages: 41
Date: 2015-12
New Economics Papers: this item is included in nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.econ.kyoto-u.ac.jp/dp/papers/e-15-011.pdf (application/pdf)

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:kue:epaper:e-15-011

Access Statistics for this paper

More papers in Discussion papers from Graduate School of Economics , Kyoto University Contact information at EDIRC.
Bibliographic data for series maintained by Graduate School of Economics Project Center ().