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Stage-specific technology shocks and employment : Could we reconcile with the RBC models ?

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  • Chahnez Boudaya

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

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    Abstract

    This paper analyses the response of labor input to technology shocks in an estimated two-stage production framework with both price and wage stickiness and stage-specific shocks to productivity. Our model features a vertical input-output structure with imperfect mobility of labors across stages. The estimation uses the maximum likelihood technique applied to the post-war US data. Our findings could easily match the standard RBC models predictions : A shock to productivity in the intermediate good production stage i) leads to an increase in both stage-specific labor and the aggregate labor and ii) explains a large proportion of the volatility of both the real GDP and the aggregate labor. Besides, regarding the output-labor correlation, the model does a very good job in matching the data.

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    Bibliographic Info

    Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00115791.

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    Date of creation: May 2006
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    Handle: RePEc:hal:cesptp:halshs-00115791

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    Related research

    Keywords: RBC models; sticky prices; sticky wages; production chain; employment; technology shocks; sectoral comovements.;

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