Technological Learning and Labor Market Dynamics

Gervais, Martin; Jaimovich, Nir; Siu, Henry; Yedid‐Levi, Yaniv

doi:10.1111/iere.12093

Cited by 12 publications

(3 citation statements)

References 62 publications

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“…Gervais et al. () consider the speed of technological learning as an alternative shock to productivity. This novel shock affects the time that it takes workers to reach the full potential of technological innovations.…”

Section: Introductionmentioning

confidence: 99%

Financial Risk and Unemployment

Eckstein

Setty

Weiss

2018

Int Economic Review

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There is a strong correlation between corporate interest rates, their spreads relative to Treasuries, and the unemployment rate. We model how corporate interest rates affect equilibrium unemployment and vacancies, in a Diamond-Mortesen-Pissarides search and matching model. Our simple model permits the exploration of U.S. business cycle statistics through the lens of financial shocks. We calibrate the model using U.S. data without targeting business cycle statistics. Volatility in the corporate interest rate can explain a quantitatively meaningful portion of the labor market. Data on corporate firms support the hypothesis that firms facing more volatile financial conditions have more volatile employment. * Manuscript . 2 Baa is a credit rating of corporate default risk. For the U.S. Treasury, we use the five-year Constant Maturity Rate. We frequently refer to the corporate interest rate as the interest rate and to the corporate interest rate spread relative to the five-year Treasury interest rate as the spread. We always use real interest rates under a variety of definitions of inflation. The interest rate spread is unaffected by inflation. 3 We choose the time period 1982-2012, as Gali and van Rens (2014) claim that during this time, labor productivity became less procyclical, opening the door for other mechanisms to be explored. Jermann and Quadrini (2012) use a similar time period in their analysis of financial shocks and the macroeconomy. We include both lagged and contemporaneous values here for completeness. During the rest of the article, unless otherwise specified, we use only contemporaneous values. 475 C (2018) by the

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Section: Introductionmentioning

confidence: 99%

Financial Risk and Unemployment

Eckstein

Setty

Weiss

2018

Int Economic Review

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“…Yet, while the quantitative implications of the DMP model for unemployment volatility have been thoroughly studied (see Merz 1995, Andolfatto 1996, den Haan, Ramey, and Watson 2000, Cole and Rogerson 2001, Hall 2005a, Shimer 2005, Yashiv 2006, Mortensen and Nagypal 2007, Hagedorn and Manovskii 2008, Fujita and Ramey 2012, Cheremukhin and Restrepo‐Echavarria 2014, Gervais et al. 2015, among others), its implications for cyclical asymmetry have surprisingly received little scrutiny.…”

Section: Related Literaturementioning

confidence: 99%

Fast Rises, Slow Declines: Asymmetric Unemployment Dynamics with Matching Frictions

Ferraro¹

2022

J of Money Credit Banking

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I argue that the textbook search-and-matching model cannot generate the observed cyclical asymmetry in the unemployment rate. In the United States, the unemployment rate rises quickly and abruptly at the onset of recessions and declines slowly and gradually during expansions. This pattern produces positive skewness in the distribution of unemployment rate changes, while the model generates a counterfactually negative skewness. Moreover, I show that the model's inability to replicate the cyclical asymmetry in the data stands regardless of its ability to generate realistic volatility in unemployment rate fluctuations.

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“…Pissarides () and Gervais et al. () use similar approaches to rescale the number of vacancy postings into JOLTS units of measurement.…”

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confidence: 99%

Monetary Policy, Trend Inflation, and Unemployment Volatility

Alves¹

2018

J of Money Credit Banking

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The literature has long agreed that the DMP model (after Diamond 1982, Mortensen 1982, Pissarides 1985 with search and matching frictions in the labor market can deliver large volatilities in labor market quantities, consistent with empirical data, only if there is at least some wage stickiness. I show, however, that the model can deliver nontrivial volatilities without wage stickiness, as long as it has price dispersion and nonzero long-run inflation rates. I find that by keeping inflation at a positive rate, monetary policy may be accountable for the large standard deviations observed on labor market variables. In addition, the Shimer (2005) puzzle disappears under monetary policy shocks.JEL codes: E2, E3, E5, J6

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Technological Learning and Labor Market Dynamics

Cited by 12 publications

References 62 publications

Financial Risk and Unemployment

Financial Risk and Unemployment

Fast Rises, Slow Declines: Asymmetric Unemployment Dynamics with Matching Frictions

Monetary Policy, Trend Inflation, and Unemployment Volatility

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