Advanced Search
MyIDEAS: Login to save this article or follow this journal

A Simple Model of Hysteresis in Employment under Exchange Rate Uncertainty

Contents:

Author Info

  • Belke, Ansgar
  • Gocke, Matthias

Abstract

A model leading to employment hysteresis due to sunk hiring- and firing-costs is proposed. A potential mechanism based on a band of inaction that could account for a 'weaker' relationship between employment and its determinants is augmented by exchange rate uncertainty. As a result of option value effects the band of inaction is widened. Thus, the hysteresis effects are strongly amplified by exchange rate uncertainty (as numerical examples demonstrate). Non-linearities in the employment-relation are implied, i.e. 'spurts' in new employment or firing may occur after an initially weak response to a reversal of the exchange rate. Copyright 1999 by Scottish Economic Society.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=sjpe&volume=46&issue=3&year=1999&part=null
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 46 (1999)
Issue (Month): 3 (August)
Pages: 260-86

as in new window
Handle: RePEc:bla:scotjp:v:46:y:1999:i:3:p:260-86

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0036-9292
More information through EDIRC

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0036-9292

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Geys, Benny & Vermeir, Jan, 2007. "Taxation and presidential approval: separate effects from tax burden and tax structure turbulence," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-09, Social Science Research Center Berlin (WZB).
  2. Belke, Ansgar & Göcke, Matthias, 2004. "Real Options Effects on Employment: Does Exchange Rate Uncertainty Matter for Aggregation?," IZA Discussion Papers 1126, Institute for the Study of Labor (IZA).
  3. Matthias G�cke & Ansgar Belke, 1999. "Micro and Macro Hysteresis in Employment under Exchange Rate Uncertainty," Computing in Economics and Finance 1999, Society for Computational Economics 722, Society for Computational Economics.
  4. Ansgar Belke & Daniel Gros, 1999. "Estimating the costs and benefits of EMU: The impact of external shocks on labour markets," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 135(1), pages 1-47, March.
  5. Belke, Ansgar & Gocke, Matthias & Hebler, Martin, 2005. "Institutional uncertainty and European Social Union: Impacts on job creation and destruction in the CEECs," Journal of Policy Modeling, Elsevier, Elsevier, vol. 27(3), pages 345-354, April.
  6. Ansgar Belke & Matthias Göcke & Laura Werner, 2014. "Hysteresis Effects in Economics – Different Methods for Describing Economic Path-dependence," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0468, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Matthias Göcke, 2009. "Firing versus Continuing Employment if an Economic Setback is Expected," MAGKS Papers on Economics, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 200918, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  8. Chen, Yu-Fu & Funke, Michael, 2002. "Exchange rate uncertainty and labour market adjustment under fixed and flexible exchange rates," HWWA Discussion Papers 196, Hamburg Institute of International Economics (HWWA).
  9. Beckmann, Rainer & Eppendorfer, Carsten & Neimke, Markus, 2002. "Financial integration within the European Union: Towards a single market for insurance," MPRA Paper 5280, University Library of Munich, Germany.
  10. Beckmann, Rainer & Eppendorfer, Carsten & Neimke, Markus, 2002. "Deepening European Financial Integration: Theoretical Considerations and Empirical Evaluation of Growth and Employment Benefits," MPRA Paper 5272, University Library of Munich, Germany.
  11. Ansgar Belke & Matthias Göcke, 2003. "Monetary Policy (In-) Effectiveness under Uncertainty - Some Normative Implications for European Monetary Policy," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim, Department of Economics, University of Hohenheim, Germany 223/2003, Department of Economics, University of Hohenheim, Germany.
  12. Johan F.M.Swinnen & Thijs Vandemoortele, 2011. "On Butterflies and Frankenstein: A Dynamic Theory of Regulation," LICOS Discussion Papers, LICOS - Centre for Institutions and Economic Performance, KU Leuven 27611, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:scotjp:v:46:y:1999:i:3:p:260-86. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.