Modelling the sectoral allocation of labour in open economy models

Laura Povoledo

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents an open economy model with tradeable and nontradeable sectors in which households cannot supply labour in both sectors at the same time. In this economy, the Frisch elasticity of labour supply is infinite. I analyse how the infinite labour supply elasticity interacts with the Producer Currency Pricing (PCP) and Local Currency Pricing (LCP) assumptions, and I find that it does not significantly alter the empirical performance of the model with respect to a broad range of statistics.

Keywords: New open economy models; Tradeable and nontradeable sectors; International business cycles; Labour supply elasticity (search for similar items in EconPapers)
JEL-codes: E24 E32 F41 (search for similar items in EconPapers)
Date: 2012-06-06
New Economics Papers: this item is included in nep-dge and nep-mac
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https://mpra.ub.uni-muenchen.de/40344/1/MPRA_paper_40344.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/48139/8/MPRA_paper_48139.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/40389/3/MPRA_paper_40389.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/48894/10/MPRA_paper_48894.pdf revised version (application/pdf)

Related works:
Journal Article: Modelling the sectoral allocation of labour in open economy models (2017)
Journal Article: Modelling the sectoral allocation of labour in open economy models (2017)
Working Paper: Modelling the sectoral allocation of labour in open economy models (2013)
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