Hours and employment variation in business cycle theory
AbstractPrevious business cycle models have made the assumption that all the variation in the labor input is either due to changes in hours per worker or changes in number of workers, but not both. In this paper, both vary. We think this a better model for estimating the contribution of Solow technology shocks to aggregate fluctuations. We find that about 70 percent of U.S. postwar cyclical fluctuations are induced by variations in the Solow technology parameter.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Minneapolis in its series Discussion Paper / Institute for Empirical Macroeconomics with number 17.
Date of creation: 1989
Date of revision:
Other versions of this item:
- Kydland, Finn E & Prescott, Edward C, 1991. "Hours and Employment Variation in Business Cycle Theory," Economic Theory, Springer, vol. 1(1), pages 63-81, January.
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