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Labor Market Imperfections and the Dynamics of Postwar Business Cycles

Steven Ambler (), Alain Guay () and Louis Phaneuf

Cahiers de recherche from CIRPEE

Abstract: An estimated dynamic general equilibrium model which features imperfectly competititve households, sticky nominal wages and costly labor input adjustment is shown to be consistent with several stylized aspects of U.S. postwar business cycle dynamics including the positive serial correlation of output, consumption, investment and employment growth over short horizons and the persistent, hump-shaped response of output to innovations in the temporary component.

Keywords: Imperfectly competitive households; Sticky nominal wages; Labor adjustment costs; Business cycles; Endogenous propagation mechanisms (search for similar items in EconPapers)
JEL-codes: E32 E62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mac
Date: 2003
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Handle: RePEc:lvl:lacicr:0319