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The dynamic effects of shocks to labour markets : evidence from OECD countries

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  • Balmaseda, Manuel
  • López-Salido, J. David

Abstract

This paper uses a set of plausible long-run identifYing restrictions on a three-variable system, including output growth, real wage growth and the unemployment rate, to isolate three independent "structural" shocks which drive fluctuations in those variables in a sample of 16 OECD countries during 1950-96. These shocks are interpreted as aggregate demand, productivity and labour supply disturbances. As a by-product of the previous analysis, the cyclical behaviour of the real wages in response to a demand shock is re-examined and two indices of real wage rigidity are derived.

Suggested Citation

  • Balmaseda, Manuel & López-Salido, J. David, 1999. "The dynamic effects of shocks to labour markets : evidence from OECD countries," UC3M Working papers. Economics 6162, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:6162
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    Vector autoregressions;

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