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The Business Cycle and the Life Cycle

In: NBER Macroeconomics Annual 2004, Volume 19

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  • Paul Gomme
  • Richard Rogerson
  • Peter Rupert
  • Randall Wright

Abstract

The paper documents how cyclical fluctuations in market work vary over the life cycle and then assesses the predictions of a life-cycle version of the growth model for those observations. The analysis yields a simple but striking finding. The main discrepancy between the model and that data lies in the inability of the model to account for fluctuations in hours for individuals in the first half of their life cycle. The predictions for those in the latter half of the life cycle are quite close to the data.

(This abstract was borrowed from another version of this item.)

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This chapter was published in:

  • Mark Gertler & Kenneth Rogoff, 2005. "NBER Macroeconomics Annual 2004, Volume 19," NBER Books, National Bureau of Economic Research, Inc, number gert05-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 6673.

    Handle: RePEc:nbr:nberch:6673

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    1. Greenwood, J. & Rogerson, R. & Wright, R., 1993. "Household Production in Real Business Cycle Thoery," RCER Working Papers 347, University of Rochester - Center for Economic Research (RCER).
    2. Shaw, Kathryn L, 1989. "Life-Cycle Labor Supply with Human Capital Accumulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(2), pages 431-56, May.
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    8. Andolfatto, David, 1996. "Business Cycles and Labor-Market Search," American Economic Review, American Economic Association, vol. 86(1), pages 112-32, March.
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