Capital mobility and labor market volatility

Çenesiz, Metin; Pierdzioch, Christian

doi:10.1007/s10368-010-0146-z

Cited by 3 publications

(1 citation statement)

References 46 publications

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“…Moreover, the impact of capital mobility on unemployment dynamics is stronger for small countries than large countries, since large economies exhibit a higher degree of synchronization of business cycles. 7 More recently, Cenesiz and Pierdzioch (2010) use a dynamic two-country model with efficiency wages to study the implications of capital mobility for labour market volatility. Similar to the Azaridis and Pissarides's model, they assume that labour is internationally immobile, while households can diversify their portfolio decisions buying foreign financial assets.…”

Section: Theoretical Motivations and Empirical Evidencementioning

confidence: 99%

International capital mobility and unemployment dynamics: Empirical evidence from OECD countries

Vallanti

2018

World Economy

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We use a panel of 20 OECD countries over a 30‐year period to investigate empirically the implications of international capital mobility for aggregate unemployment dynamics. To this aim, we employ standard regression analysis and dynamic simulations to illustrate the channels through which international capital mobility impacts unemployment adjustments to productivity shocks and quantify its effect on unemployment volatility. We find that capital mobility plays a significant role in generating unemployment responses to idiosyncratic productivity shocks which are wider but less persistent. Moreover, the empirical evidence suggests that the responsiveness effect dominates the persistence effect, implying that higher international capital mobility increases unemployment volatility. The effect is not negligible. Monte Carlo simulations of the model show that moving from a closed economy to an open economy scenario causes the standard deviation of unemployment to increase by around 26%.

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Section: Theoretical Motivations and Empirical Evidencementioning

confidence: 99%

International capital mobility and unemployment dynamics: Empirical evidence from OECD countries

Vallanti

2018

World Economy

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The price-price Phillips curve in small open economies and monetary unions: theory and empirics

Vaona

2014

Int Econ Econ Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper extends the efficiency wages/partially adaptive expectations Phillips curve, otherwise known as the price-price Phillips curve, from a closed economy context to an open economy one with both commodity trade and capital mobility. We also consider the case of a monetary union (a country) with two member states (regions). The theoretical results are a priori ambiguous. However, in the first place, on resorting to plausible numerical simulations, economic openness increases the reactiveness of inflation to the unemployment rate. In regard to a monetary union, the national unemployment multiplier in the aggregate Phillips curve decreases with the weight of the member state in aggregate employment and increases with that in output. Secondly, we show in two empirical applications that our calibration can provide informative priors for models to be estimated thanks to the Kalman filter. Terms of use: Documents in EconStor may

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Uneven Effects, an Evolutionary Model of Poverty Traps After Trade Liberalization

Gómez‐Ramírez

Padilla‐Romo

2023

Review of Political Economy

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Capital mobility and labor market volatility

Abstract: Capital mobility, Efficiency wages, Labor market volatility, E44, F36, F41,

Cited by 3 publications

References 46 publications

International capital mobility and unemployment dynamics: Empirical evidence from OECD countries

International capital mobility and unemployment dynamics: Empirical evidence from OECD countries

The price-price Phillips curve in small open economies and monetary unions: theory and empirics

Uneven Effects, an Evolutionary Model of Poverty Traps After Trade Liberalization

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