Macroeconomic Regimes, Technological Shocks and Employment Dynamics

36 Pages Posted: 31 May 2016

See all articles by Tommaso Ferraresi

Tommaso Ferraresi

Istituto Regionale Programmazione Economica Toscana (IRPET)

Andrea Roventini

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM); Observatoire Français des Conjonctures Economiques (OFCE)

Willi Semmler

The New School - Department of Economics; Universitaet Bielefeld; IIASA

Date Written: May 30, 2016

Abstract

In this work, we investigate the interrelations among technology, output and employment in the different states of the U.S. economy (recessions vs. expansions). More precisely, we estimate different threshold vector auto-regression (TVAR) models with TFP, hours, and GDP, employing the latter as threshold variable, and we assess the ensuing generalized impulse responses of GDP and hours as to TFP shocks. We find that positive productivity shocks, while spurring GDP growth, display a negative effect on hours worked at least on impact, independently of the state of the economy. In the 1957-2011 period, the effects of productivity shocks on employment are abundantly negative in downturns, but they are not significantly different from zero in good times. However, the impact of TFP shocks in different business cycle regimes depends on the chosen sample: after the mid eighties (1984-2011), productivity shocks increase hours during recessions. Finally, we express and test some conjectures that might have caused the changes in the responses in different time periods.

Keywords: technology shocks, employment, threshold vector autoregression, generalized impulse response functions

JEL Classification: E32, O33, C32, E63, E20

Suggested Citation

Ferraresi, Tommaso and Roventini, Andrea and Semmler, Willi, Macroeconomic Regimes, Technological Shocks and Employment Dynamics (May 30, 2016). Available at SSRN: https://ssrn.com/abstract=2786541 or http://dx.doi.org/10.2139/ssrn.2786541

Tommaso Ferraresi

Istituto Regionale Programmazione Economica Toscana (IRPET) ( email )

Firenze, 50100
Italy

Andrea Roventini (Contact Author)

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM) ( email )

Piazza Martiri della Liberta', 33-I-56127
Pisa
Italy

Observatoire Français des Conjonctures Economiques (OFCE)

69 Quai d'Orsay
Paris 75004
France

Willi Semmler

The New School - Department of Economics ( email )

65 Fifth Avenue
New York, NY 10003
United States

HOME PAGE: http://www.newschool.edu/nssr/faculty/?id=4e54-6b79-4e41-3d3d

Universitaet Bielefeld ( email )

Universitätsstraße 25
Bielefeld, NRW
Germany

IIASA ( email )

Schlossplatz 1
Laxenburg/Austria, A-2361
Austria

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