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Time aggregation and unemployment volatility

Author

Listed:
  • Noritaka Kudoh

    (Nagoya University)

  • Hiroaki Miyamoto

    (Tokyo Metropolitan University)

Abstract

This paper explores the importance of time aggregation for labor market fluctuations. Instead of correcting time aggregation bias in the data, we develop a simple search-matching model in which some individuals lose and find a job within a period to artificially generate the bias. The magnitude of time aggregation bias is highly procyclical. An increase in the degree of time aggregation bias is associated with a significantly lower unemployment volatility.

Suggested Citation

  • Noritaka Kudoh & Hiroaki Miyamoto, 2023. "Time aggregation and unemployment volatility," Economics Bulletin, AccessEcon, vol. 43(2), pages 968-977.
    • Handle: RePEc:ebl:ecbull:eb-23-00108
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I2-P78.pdf
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    References listed on IDEAS

    as
    1. Noritaka Kudoh & Hiroaki Miyamoto & Masaru Sasaki, 2019. "Employment and Hours over the Business Cycle in a Model with Search Frictions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 436-461, January.
    2. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, April.
    3. Christopher A. Pissarides, 2009. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," Econometrica, Econometric Society, vol. 77(5), pages 1339-1369, September.
    4. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    5. Kudoh, Noritaka & Miyamoto, Hiroaki, 2023. "Do general equilibrium effects matter for labor market dynamics?," Economic Modelling, Elsevier, vol. 119(C).
    6. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    worker flows; time aggregation bias; unemployment volatility.;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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