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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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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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Cited by:
  1. Albert Marcet & Francesc Obiols-Homs & Philippe Weil, 2002. "Incomplete markets, labor supply and capital accumulation," Economics Working Papers 659, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2003.
  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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