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Impact of labour market shocks on business cycle fluctuations in Poland

Author

Listed:
  • Ma³gorzata Skibiñska

    () (Narodowy Bank Polski, Economic Institute
    Warsaw School of Economics)

Abstract

This paper investigates whether labour market shocks contribute to business cycle fluctuations in Poland. To assess the impact of labour market disturbances, we develop an international real business cycle model with non-Walrasian labour market in the spirit of Diamond, Mortensen and Pissarides. To fit the model to the data, we use Bayesian techniques to estimate selected model parameters and shock properties. We find that hiring cost and job destruction rate disturbances were non-negligible factors affecting both output and consumption variability in the period of 1995 Q1 ? 2013 Q3. Shock to the workers’ bargaining power turns out to have almost no impact on evolution of these two macro variables. Moreover, our results show the condition derived by Hosios (1990) is nearly satisfied, i.e. the degree of inefficiency resulting from the search process decentralization is very small.

Suggested Citation

  • Ma³gorzata Skibiñska, 2015. "Impact of labour market shocks on business cycle fluctuations in Poland," Bank i Kredyt, Narodowy Bank Polski, vol. 46(1), pages 1-40.
  • Handle: RePEc:nbp:nbpbik:v:46:y:2015:i:1:p:1-40
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    labour market; search and matching frictions; business cycle;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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