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Incomplete Unemployment Insurance and Aggregate Fluctuations

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  • Francesc Obiols-Homs

    (ITAM)

Abstract

This paper develops a real business cycle model characterized by idiosyncratic employment shocks and quantitatively explores the behavior of aggregate variables under the assumptions of complete and incomplete insurance markets. The results show that the model with incomplete markets produces standard deviations and correlations of aggregate labor input and labor productivity close to the ones of the US economy for the post-war period. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/S1094-2025(03)00005-X
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Bibliographic Info

Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 6 (2003)
Issue (Month): 3 (July)
Pages: 602-636

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Handle: RePEc:red:issued:v:6:y:2003:i:3:p:602-636

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Keywords: aggregate fluctuations; Idiosyncratic shocks; Incomplete insurance;

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References

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  1. Cooley, T.F. & Cho, J.O., 1991. "The Business Cycle with Nominal Contracts," Papers 90-07, Rochester, Business - General.
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  8. Cho, J-O. & Cooley, T.F., 1988. "Employment And Hours Over The Business Cycle," Papers 88-03, Rochester, Business - General.
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  31. Baxter, Marianne, 1996. "Are Consumer Durables Important for Business Cycles?," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 147-55, February.
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Cited by:
  1. Albert Marcet & Francesc Obiols-Homs & Philippe Weil, 2007. "Incomplete Markets, Labor Supply and Capital Accumulation," Sciences Po publications info:hdl:2441/8623, Sciences Po.
  2. repec:spo:wpecon:info:hdl:2441/8623 is not listed on IDEAS
  3. repec:spo:wpecon:info:hdl:2441/8713 is not listed on IDEAS

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