Labor Market Dynamics and the Business Cycle: Structural Evidence for the United States
Morten Ravn () and
CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy
We use a 12-dimensional VAR to examine the dynamic e®ects on the labor market of four structural technology and policy shocks. For each shock, we examine the dynamic effects on the labor market, the importance of the shock for labor market volatility, and the comovement between labor market variables and other key aggregate variables in response to the shock. We document that labor market indicators display ”hump-shaped” responses to the identified shocks. Technology shocks and monetary policy shocks are important for labor market volatility but the ranking of their importance is sensitive to the VAR specification. The conditional correlations at business cycle frequencies are similar in response to the four shocks apart from the correlations between hours worked, labor productivity and real wages. To account for the unconditional correlations between these variables, a mixture of shocks are required.
Keywords: Structural VAR; labor market dynamics; the Beveridge curve (search for similar items in EconPapers)
JEL-codes: C32 E24 E32 E52 E62 (search for similar items in EconPapers)
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Published in Scandinavian Journal of Economics, 2008, vol. 109(4), pages 743-777
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Journal Article: Labor Market Dynamics and the Business Cycle: Structural Evidence for the United States (2008)
Working Paper: Labour Market Dynamics and the Business Cycle: Structural Evidence for the United States (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:182
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