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Stage-specific technology shocks and employment : Could we reconcile with the RBC models ?

  • Chahnez Boudaya

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

This paper analyses the response of labor input to technology shocks in an estimated two-stage production framework with both price and wage stickiness and stage-specific shocks to productivity. Our model features a vertical input-output structure with imperfect mobility of labors across stages. The estimation uses the maximum likelihood technique applied to the post-war US data. Our findings could easily match the standard RBC models predictions : A shock to productivity in the intermediate good production stage i) leads to an increase in both stage-specific labor and the aggregate labor and ii) explains a large proportion of the volatility of both the real GDP and the aggregate labor. Besides, regarding the output-labor correlation, the model does a very good job in matching the data.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00115791.

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Date of creation: May 2006
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Publication status: Published in Cahiers de la Maison des Sciences Economiques 2006.43 - ISSN 1624-0340. 2006
Handle: RePEc:hal:cesptp:halshs-00115791
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00115791
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  1. Ireland, Peter N, 2000. "Interest Rates, Inflation, and Federal Reserve Policy since 1980," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(3), pages 417-34, August.
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