Technology shocks and labor market dynamics: Some evidence and theory

Liu, Zheng; Phaneuf, Louis

doi:10.1016/j.jmoneco.2007.06.015

Cited by 43 publications

(17 citation statements)

References 22 publications

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“…While technology shocks have no effect on wages or employment, (10) shows that positive technology shocks reduce prices and thus raise real wages. The prediction that technology shocks reduce prices but do not affect employment and nominal wages is consistent with the findings of Liu and Phaneuf (2007) [37]. Using a structural vector autoregression model, they find that a positive technology shock may either raise or lower per capita hours worked, de-pending on the specification of the model (i.e., whether hours are expressed in terms of log-levels or log-differences).…”

Section: Technology Shockssupporting

confidence: 67%

An Efficiency Wage—Imperfect Information Model of the Phillips Curve

Campbell¹

2017

JSS

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This study develops an efficiency wage model in which workers have imperfect information about wages elsewhere. Firms' profit-maximizing behavior results in a Phillips curve relationship. Three types of Phillips curves are derived: a wage-wage Phillips curve, a wage-price Phillips curve, and a priceprice Phillips curve. The wage-wage Phillips curve is a reduced form relationship with the coefficient on lagged wage inflation equaling 1. To obtain the wage-price and the price-price Phillips curves, stochastic shocks to the growth rate of demand are modeled, yielding expressions over time for wage inflation, price inflation, and unemployment. These expressions are used in a regression of current wage or price inflation on unemployment and lagged price inflation, and it is demonstrated that the coefficient on lagged inflation asymptotically approaches 1. In addition, the model predicts that real wages are strictly procyclical in response to technology shocks, but can be either procyclical, acyclical, or countercyclical in response to demand shocks. Thus, this study can explain why economists have reached different conclusions about the cyclical behavior of real wages.

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Section: Technology Shockssupporting

confidence: 67%

An Efficiency Wage—Imperfect Information Model of the Phillips Curve

Campbell¹

2017

JSS

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“…A growing number of studies identify technology shocks by imposing that they are the only component that can affect the level of productivity in the long run, as originally proposed by Blanchard and Quah (1989). Using this identification scheme Gali (1999), Gali et al (2003), Francis and Ramey (2005), Francis et al (2005), Liu and Phaneuf (2007), Fisher (2006), and Canova et al (2010) find that technology shocks have a contractionary effect on employment. On the other hand, despite using a similar methodology, Christiano et al (2004) obtain the opposite result.…”

Section: An Overview Of the Literaturementioning

confidence: 99%

Neutral Technology Shocks and the Dynamics of Labor Input: Results From an Agnostic Identification*

Mumtaz

Zanetti

2012

Int Economic Review

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This article studies the dynamic response of labor input to neutral technology shocks. It uses benchmark dynamic, stochastic, general equilibrium models enriched with labor market search and matching frictions and investment-specific technological progress that enables a new, agnostic, identification scheme based on sign restrictions on a structural vector autoregression (SVAR). The estimation supports an increase of labor input in response to neutral technology shocks. This finding is robust across different perturbations of the SVAR model. * Manuscript

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“…As we discussed in Section 6.2, the wage-markup shock and the depreciation shock have the largest variances among all eight structural shocks. The neutral technology shock is of considerable interest because of the debate in the recent literature about its dynamic effects on the labor market variables (e.g., Galí (1999), Christiano, Eichenbaum, and Vigfusson (2003), Uhlig (2004), and Liu and Phaneuf (2007)). …”

Section: Variance Decompositionsmentioning

confidence: 99%

Sources of Macroeconomic Fluctuations: A Regime-Switching DSGE Approach

2010

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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. We examine the sources of macroeconomic fluctuations by estimating a variety of richly parameterized DSGE models within a unified framework that incorporates regime switching both in shock variances and in the inflation target. We propose an efficient methodology for estimating regime-switching DSGE models. Our counterfactual exercises show that changes in the inflation target are not the main driving force of high inflation in the 1970s. The model that best fits the U.S. time-series data is the one with synchronized shifts in shock variances across two regimes, and the fit does not rely on strong nominal rigidities. We provide evidence that a shock to the capital depreciation rate, which resembles a financial shock, plays a crucial role in accounting for macroeconomic fluctuations. Terms of use: Documents in EconStor may

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Technology shocks and labor market dynamics: Some evidence and theory

Cited by 43 publications

References 22 publications

An Efficiency Wage—Imperfect Information Model of the Phillips Curve

An Efficiency Wage—Imperfect Information Model of the Phillips Curve

Neutral Technology Shocks and the Dynamics of Labor Input: Results From an Agnostic Identification*

Sources of Macroeconomic Fluctuations: A Regime-Switching DSGE Approach

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