Abstract

http://ssrn.com/abstract=1547570
 
 

References (64)



 
 

Citations (5)



 


 



Monetary Persistence and the Labor Market: A New Perspective


Wolfgang Lechthaler


Institute for the World Economy

Christian Merkl


Kiel Institute for the World Economy; University of Kiel; Institute for the Study of Labor (IZA)

Dennis J. Snower


University of Kiel - Institute for World Economics (IfW); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

January 2010

CEPR Discussion Paper No. DP7650

Abstract:     
In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business cycle. The reactions to monetary and real shocks become much more sluggish. Job creation and job destruction are negatively correlated. And the volatility of unemployment is much larger than in the standard search and matching model.

Number of Pages in PDF File: 34

Keywords: Business Cycle Statistics, Hiring and Firing Costs, Labor Market, Monetary Persistence

JEL Classification: E24, E32, E52, J23

working papers series





Date posted: February 8, 2010  

Suggested Citation

Lechthaler, Wolfgang and Merkl, Christian and Snower, Dennis J., Monetary Persistence and the Labor Market: A New Perspective (January 2010). CEPR Discussion Paper No. DP7650. Available at SSRN: http://ssrn.com/abstract=1547570

Contact Information

Wolfgang Lechthaler (Contact Author)
Institute for the World Economy ( email )
Düsternbrooker Weg 120
Kiel, D-24105
Germany
HOME PAGE: http://www.ifw-kiel.de/kiel-institute-for-the-world-economy/view?set_language=en
Christian Merkl
Kiel Institute for the World Economy ( email )
P.O. Box 4309
Kiel, D-24100
Germany
University of Kiel ( email )
Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany
Institute for the Study of Labor (IZA) ( email )
P.O. Box 7240
Bonn, D-53072
Germany
Dennis J. Snower
University of Kiel - Institute for World Economics (IfW) ( email )
Duesternbrooker Weg 120
D-24118 Kiel
Germany
+49+431-8814-235 (Phone)
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
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References:  64
Citations:  5

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