Complementarity of Labour Market Institutions, Equilibrium Unemployment and the Persistence of Business Cycles
AbstractThis paper evaluates complementarities of labour market institutions and the business cycle in the context of a stochastic dynamic general equilibrium model economy. Matching between workers and vacancies with endogenous time spent in search, Nash-bargained wages, payroll taxation, and differential support for unemployed labour in search and leisure are central aspects of the model. For plausible regions of the policy and institutional parameter space, the model exhibits more persistence than standard RBC models and can exhibit indeterminacy of rational expectation paths without increasing returns in production. Furthermore, labour market institutions act in a complementary fashion in generating these
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2592.
Date of creation: Oct 2000
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Other versions of this item:
- Burda, Michael C. & Weder, Mark, 1999. "Complementarity of labor market institutions, equilibrium unemployment and the persistence of business cycles," SFB 373 Discussion Papers 1999,49, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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- Burda, Michael C & Weder, Mark, 2010.
"Payroll Taxes, Social Insurance and Business Cycles,"
CEPR Discussion Papers
7984, C.E.P.R. Discussion Papers.
- Michael C. Burda & Mark Weder, 2010. "Payroll Taxes, Social Insurance and Business Cycles," SFB 649 Discussion Papers SFB649DP2010-042, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Michael C. Burda & Mark Weder, 2010. "Payroll Taxes, Social Insurance and Business Cycles," School of Economics Working Papers 2010-17, University of Adelaide, School of Economics.
- Mark Weder & Michael Burda, 2010. "Payroll Taxes, Social Insurance and Business Cycles," 2010 Meeting Papers 781, Society for Economic Dynamics.
- Burda, Michael C. & Weder, Mark, 2010. "Payroll Taxes, Social Insurance and Business Cycles," IZA Discussion Papers 5150, Institute for the Study of Labor (IZA).
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