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The business cycle and the life cycle

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Author Info

  • 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.

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File URL: http://www.clevelandfed.org/Research/Workpaper/2004/wp04-04.pdf
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Bibliographic Info

Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 0404.

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Date of creation: 2004
Date of revision:
Handle: RePEc:fip:fedcwp:0404

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Keywords: Business cycles ; Hours of labor;

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References

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  21. 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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  31. 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).
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