Aggregate Employment Fluctuations with Microeconomic Asymmetries

Jeffrey Campbell and Jonas Fisher

No 5767, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We provide a simple explanation for the observation that the variance of job destruction is greater than the variance of job creation: job creation is costlier at the margin than job destruction. As Caballero [2] has argued, asymmetric employment adjustment costs at the establishment level need not imply asymmetric volatility of aggregate job flows. We construct an equilibrium model in which (S,s)-type employment policies respond endogenously to aggregate shocks. The microeconomic asymmetries in the model can dampen the response of total job creation to an aggregate shock and cause it to be less volatile than total job destruction. This is so even though aggregate shocks are symmetrically distributed.

JEL-codes: E1 (search for similar items in EconPapers)
Date: 1996-09
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published as Campbell, J. R. and J. D. M. Fisher. "Aggregate Employment Fluctuations With Microeconomic Asymmetries," American Economic Review, 2000, v90(5,Dec), 1323-1345.

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Related works:
Journal Article: Aggregate Employment Fluctuations with Microeconomic Asymmetries (2000)
Working Paper: Aggregate employment fluctuations with microeconomic asymmetries (1998)
Working Paper: Aggregate employment fluctuations with microeconomic asymmetries (1996)
Working Paper: Aggreagate Employment Fluctuations with Microeconomic Asymmetries (1996)
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