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Asymmetric Adjustment Costs and Aggregate Job Flows: Specification, Estimation and Testing with French Data

Author

Listed:
  • Patrick Fève

    (University of Toulouse (GREMAQ and IDEI))

  • Xavier Fairise

    (University of Angers, GEAPE and Eurequa)

Abstract

This paper aims to study whether a simple asymmetric adjustment costs model with tractable heterogeneity can account for the observed distribution of French aggregate job flows. Each firm chooses endogenously its level of hiring or firing depending on the level of a specific technology shock. These policy rules allows, via aggregation, to account for dynamics in aggregate job flows. The deep parameters of the model are then estimated using the Simulated Method of Moments. We then show that the model is able to match some key features of the French aggregate job flows, but the results appears sensitive to the level of heterogeneity.

Suggested Citation

  • Patrick Fève & Xavier Fairise, 2002. "Asymmetric Adjustment Costs and Aggregate Job Flows: Specification, Estimation and Testing with French Data," Economics Bulletin, AccessEcon, vol. 3(11), pages 1-13.
  • Handle: RePEc:ebl:ecbull:eb-02c50005
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    Keywords

    asymmetric adjustment costs;

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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