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Abstract

An identical two-sector productivity shock causes Rybczynski (1955) and Stolper and Samuelson (1941) effects that release leisure time and initially raise the relative price of human capital investment so as to favor it over goods production. Modified by having the household sector produce human capital investment sector, the RBC model follows the international approach of Maffezzoli (2000) and so adds a second sector relative to Jones et al. (2005). This captures key major US RBC data: output growth persistence, with hump-shaped impulse responses; hump-shaped physical capital investment impulse responses; Gali's (1999) negative impulse response of labour supply; and hours volatility.

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Bibliographic Info

Paper provided by Institute of Economics, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 1128.

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Length: 47 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:has:discpr:1128

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Related research

Keywords: real business cycle; human capital; endogenous growth;

Other versions of this item:

Find related papers by JEL classification:

• E24 - Macroeconomics and Monetary Economics - - Macroeconomics: 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
• O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

This paper has been announced in the following NEP Reports:

• NEP-ALL-2011-07-27 (All new papers)
• NEP-DGE-2011-07-27 (Dynamic General Equilibrium)
• NEP-HRM-2011-07-27 (Human Capital & Human Resource Management)
• NEP-MAC-2011-07-27 (Macroeconomics)

References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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1. Richard Rogerson, 2010. "Indivisible Labor, Lotteries and Equilibrium," Levine's Working Paper Archive 250, David K. Levine.
   
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9. repec:ebl:ecbull:v:5:y:2003:i:11:p:1-8 is not listed on IDEAS
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:

1. Real Business Cycles with a Human Capital Investment Sector and Endogenous Growth: Persistence, Volatility and Labor Puzzles
   by Christian Zimmermann in NEP-DGE blog on 2011-04-14 19:22:54

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Cited by:

1. Gillman, Max, 2012. "AS-AD in the Standard Dynamic Neoclassical Model: Business Cycles and Growth Trends," Cardiff Economics Working Papers E2012/12, Cardiff University, Cardiff Business School, Economics Section.
   
   • Max Gillman, 2012. "AS-AD in the Standard Dynamic Neoclassical Model: Business Cycles and Growth Trends," CEU Working Papers 2012_8, Department of Economics, Central European University, revised 15 May 2012.

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