Can Intangible Capital Explain Cyclical Movements in the Labor Wedge?
AbstractIntangible capital is an important factor of production in modern economies that is generally neglected in business cycle analyses. We demonstrate that intangible capital can have a substantial impact on business cycle dynamics, especially if the intangible is complementary with production capacity. We focus on customer capital: the capital embodied in the relationships a firm has with its customers. Introducing customer capital into a standard real business cycle model generates a volatile and countercyclical labor wedge, due to a mismeasured marginal product of labor. We also provide new evidence on cyclical variation in selling effort to discipline the exercise.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-2014-2.
Length: 20 pages
Date of creation: 15 Jan 2014
Date of revision:
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Other versions of this item:
- Fran?ois Gourio & Leena Rudanko, 2014. "Can Intangible Capital Explain Cyclical Movements in the Labor Wedge?," American Economic Review, American Economic Association, vol. 104(5), pages 183-88, May.
- Francois Gourio & Leena Rudanko, 2014. "Can Intangible Capital Explain Cyclical Movements in the Labor Wedge?," NBER Working Papers 19900, National Bureau of Economic Research, Inc.
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-03-01 (All new papers)
- NEP-BEC-2014-03-01 (Business Economics)
- NEP-DGE-2014-03-01 (Dynamic General Equilibrium)
- NEP-LAB-2014-03-01 (Labour Economics)
- NEP-MAC-2014-03-01 (Macroeconomics)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Can Intangible Capital Explain Cyclical Movements in the Labor Wedge?
by Christian Zimmermann in NEP-DGE blog on 2014-03-05 16:15:32
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