Pricing behavior and the comovement of productivity and labor: evidence from firm-level data
Recent contributions have suggested that technology shocks have a negative short-run effect on labor input, contrary to the predictions of standard flexible-price models of the business cycle. Some authors have interpreted this finding as evidence in favor of stickyprice models, while others have either augmented flexible-price models in a number of ways or disputed the empirical finding itself. In this paper we estimate a number of alternative measures of TFP growth for a representative sample of Italian manufacturing firms and find a negative impact of productivity shocks on labor input. Furthermore, by relying on the firmlevel reported frequency of price reviews, we find that the contractionary effect is strong for firms with stickier prices, but it is weaker or not significant for firms with more flexible prices, consistently with the prediction of sticky-price models.
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| Length: | |
| Date of creation: | Dec 2004 |
| Date of revision: | |
| Handle: | RePEc:bdi:wptemi:td_524_04 |
| Contact details of provider: | Postal: Web page: http://www.bancaditalia.it More information through EDIRC
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References listed on IDEAS
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- Lopez-Salido, Jose David & Michelacci, Claudio, 2004.
"Technology Shocks and Job Flows,"
CEPR Discussion Papers
4426, C.E.P.R. Discussion Papers.
- Claudio Michelacci & David Lopez-Salido, 2007. "Technology Shocks and Job Flows," Review of Economic Studies, Oxford University Press, vol. 74(4), pages 1195-1227.
- Claudio Michelacci & David Lopez-Salido, 2004. "Technology Shocks And Job Flows," Working Papers wp2004_05, CEMFI.
- Claudio Michelacci & David López-Salido, 2003. "Technology shocks and job flows," Banco de Espa�a Working Papers 0308, Banco de Espa�a.
- Jordi Gali & Pau Rabanal, 2004.
"Technology Shocks and Aggregate Fluctuations: How Well Does the RBS Model Fit Postwar U.S. Data?,"
NBER Working Papers
10636, National Bureau of Economic Research, Inc.
- Jordi Galà & Pau Rabanal, 2004. "Technology Shocks and Aggregate Fluctuations; How Well Does the RBC Model Fit Postwar U.S. Data?," IMF Working Papers 04/234, International Monetary Fund.
- Galí, Jordi & Rabanal, Pau, 2004.
"Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data?,"
CEPR Discussion Papers
4522, C.E.P.R. Discussion Papers.
- Jordi Galà & Pau Rabanal, 2004. "Technology Shocks and Aggregate Fluctuations; How Well Does the RBC Model Fit Postwar U.S. Data?," IMF Working Papers 04/234, International Monetary Fund.
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