The labor wedge as a matching friction

Cheremukhin, Anton; Restrepo-Echavarría, Paulina

doi:10.1016/j.euroecorev.2014.02.008

Cited by 28 publications

(17 citation statements)

References 28 publications

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“…More recent literature, e.g. Cheremukhin and Restrepo-Echavarria (2014), has shown that the degree of efficiency of the matching process between employers and employees can give rise to the labor distortions measured in this paper.…”

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confidence: 75%

Colombia: Selected Issues Paper

Fund¹

2014

IMF Staff Country Reports

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This Selected Issues Paper on Colombia was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on May 7, 2015. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Colombia or the Executive Board of the IMF.

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confidence: 75%

Colombia: Selected Issues Paper

Fund¹

2014

IMF Staff Country Reports

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“…Third, because many of the parameters of the model are estimated using MCMC methods, I use the same approach to recover the wedges. I apply the Kalman filter to the linearized version of the model to compute the stochastic innovations of the wedges as in Cheremukhin and Restrepo-Echavarria (2009, [8]).…”

Section: A Diagnostic Toolmentioning

confidence: 99%

Endogenous borrowing constraints and stagnation in Latin America

Restrepo-Echavarría

2019

Journal of Economic Dynamics and Control

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Latin America has had striking changes in economic performance over time. None more striking than consumption. Consumption per-capita in the year 2004 was roughly the same as it was in 1980. Latin America is also an open economic region, with several international debt crises. This paper studies the time path of consumption using a small open economy real business cycle model with limited commitment. I compare the distortions to the planner's pareto weights and investment that are generated endogenously by the model, to those that can be recovered from an international extension of a business cycle accounting exercise in the spirit of Chari, Kehoe and McGrattan (2007). I find that the limited commitment model does a good job at explaining the behavior of Latin American consumption and that the endogenous distortions to the planner's pareto weights are very similar to those recovered from the accounting exercise.

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“…We assume that there is a stochastic world trend for both population and productivity and associate this with growth in the rest of the world (for similar approaches, see Canova 1998, Fernández-Villaverde and Rubio-Ramírez 2007, and Cheremukhin and Restrepo-Echavarria 2014. Specifically, we assume that the rest of the world productivity and population evolve according to…”

Section: Growth and Uncertaintymentioning

confidence: 99%

Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America

Ohanian

Restrepo-Echavarría

Wright

2018

American Economic Review

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After World War II, international capital flowed into slow-growing Latin America rather than fast-growing Asia. This is surprising as, everything else equal, fast growth should imply high capital returns. This paper develops a capital flow accounting framework to quantify the role of different factor market distortions in producing these patterns. Surprisingly, we find that distortions in labor markets, rather than domestic or international capital markets, account for the bulk of these flows. Labor market distortions that indirectly depress investment incentives by lowering equilibrium labor supply explain two-thirds of observed flows, while improvement in these distortions over time accounts for much of Asia's rapid growth. (JEL E22, E24, E32, F21, F32, O16, O47)

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The labor wedge as a matching friction

Cited by 28 publications

References 28 publications

Colombia: Selected Issues Paper

Colombia: Selected Issues Paper

Endogenous borrowing constraints and stagnation in Latin America

Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America

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