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Dynamic employment adjustments over business cycles

  • Tung Liu

    ()

    (Department of Economics, Ball State University)

  • Lee C. Spector

    ()

    (Department of Economics, Ball State University)

This paper uses U.S. monthly industrial production employment data between 1964 and 2000 to examine the dynamic labor adjustments of production workers and nonproduction workers in both the short and longrun. The results from the short-run analysis show that the dynamic adjustment of production workers is consistent with business cycles. However, the adjustment of nonproduction workers is relatively fixed, lags behind the shocks over business cycle changes, and exhibits the quasi-fixed factor property. In the long-run, we found that nonproduction workers and production workers are cointegrated indicating that the two series are in long-run equilibrium.

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File URL: http://econfac.iweb.bsu.edu/research/workingpapers/bsuecwp200302liu.pdf
File Function: First version, 2003
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Paper provided by Ball State University, Department of Economics in its series Working Papers with number 200302.

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Length: 19 pages
Date of creation: Dec 2003
Date of revision: Jan 2005
Publication status: Published in Empircal Economics, 2005, vol. 30, no. 1, pp. 151-169
Handle: RePEc:bsu:wpaper:200302
Contact details of provider: Postal: Muncie, Indiana 47306
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Fax: (765) 285-8024
Web page: http://www.bsu.edu/econ

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  16. Burnside, Craig & Eichenbaum, Martin & Rebelo, Sergio, 1993. "Labor Hoarding and the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 245-73, April.
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