IDEAS home Printed from https://ideas.repec.org/a/wly/iecrev/v59y2018i3p1491-1510.html
   My bibliography  Save this article

Labor Supply Factors And Economic Fluctuations

Author

Listed:
  • Claudia Foroni
  • Francesco Furlanetto
  • Antoine Lepetit

Abstract

We propose a new Vector Autoregressive identification scheme that enables us to disentangle labor supply shocks from wage bargaining shocks. Identification is achieved by imposing sign restrictions on the responses of the unemployment rate and the labor force participation rate to the two shocks. According to our analysis on United States data over the period 1985–2014, labor supply shocks and wage bargaining shocks are important drivers of output and unemployment both in the short run and in the long run. These results suggest that identification strategies used in estimated new Keynesian models to disentangle labor market shocks may be misguided.

Suggested Citation

  • Claudia Foroni & Francesco Furlanetto & Antoine Lepetit, 2018. "Labor Supply Factors And Economic Fluctuations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(3), pages 1491-1510, August.
    • Handle: RePEc:wly:iecrev:v:59:y:2018:i:3:p:1491-1510
    DOI: 10.1111/iere.12311
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/iere.12311
    Download Restriction: no
    File URL: https://libkey.io/10.1111/iere.12311?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    More about this item

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:iecrev:v:59:y:2018:i:3:p:1491-1510. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.