Aggregate Employment, Real Business Cycles, and Superior Information

Posted: 26 Jan 1998

See all articles by Martin Boileau

Martin Boileau

University of Colorado at Boulder - Department of Economics

Michel Normandin

HEC Montreal - Institute of Applied Economics

Date Written: December 1997

Abstract

We test whether dynamic, stochastic, general equilibrium artificial economies associated with several labor market institutions provide an adequate characterization of aggregate employment volatility and dynamics. Our test is robust to possible misspecifications about the information set used by economic agents to forecast future events. Accounting for the agents' superior information, we find that the divisible labor, indivisible labor, and labor hoarding structures replicate employment volatility, in contrast to the nominal wage contracts and labor adjustment costs structures. Also, the labor hoarding structure provides a substantially better account of employment dynamics than the other labor market structures.

JEL Classification: E37, C32, E32, E24

Suggested Citation

Boileau, Martin and Normandin, Michel, Aggregate Employment, Real Business Cycles, and Superior Information (December 1997). Available at SSRN: https://ssrn.com/abstract=48655

Martin Boileau

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309-0256
United States
(303) 492-2108 (Phone)
(303) 492-8960 (Fax)

Michel Normandin (Contact Author)

HEC Montreal - Institute of Applied Economics ( email )

3000, ch. de la Côte-Ste-Catherine
Montréal, Quebec H3T 2A7
Canada

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
466
PlumX Metrics