The Cyclical Behavior of Equilibrium Unemployment and Vacancies Across OECD Countries
AbstractWe show that the inability of a standardly-calibrated stochastic labor search-and-matching model to account for the observed volatility of unemployment and vacancies extends beyond U.S. data to a set of OECD countries -- the volatility puzzle is ubiquitous. We also argue that using cross-country data is helpful in evaluating the relative merits of the model alternatives that have appeared in the literature. In illustrating this point, we take the solution proposed in Hagedorn and Manovskii (2008) and show that it continues to predict counterfactually low volatility in labor market variables for countries that exhibit sufficiently low persistence in their estimated productivity processes.
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2013 Meeting Papers with number 450.
Date of creation: 2013
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Other versions of this item:
- Pedro S. Amaral & Murat Tasci, 2012. "The cyclical behavior of equilibrium unemployment and vacancies across OECD countries," Working Paper 1236, Federal Reserve Bank of Cleveland.
- NEP-ALL-2013-11-16 (All new papers)
- NEP-DGE-2013-11-16 (Dynamic General Equilibrium)
- NEP-LAB-2013-11-16 (Labour Economics)
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