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The Fundamental Surplus Revisited

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  • Bingsong Wang

    (Department of Economics, University of Sheffield, S1 4DT, UK)

Abstract

To generate large responses of unemployment to productivity changes requires a high elasticity of the fundamental surplus with respect to productivity. When all deductions that enter the fundamental surplus are acyclical, and the fundamental surplus does not involve endogenous variables, then the elasticity of the fundamental surplus coincides with the inverse of the fundamental surplus fraction.

Suggested Citation

  • Bingsong Wang, 2022. "The Fundamental Surplus Revisited," Working Papers 2022021, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2022021
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    File URL: https://www.sheffield.ac.uk/economics/research/serps
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    the fundamental surplus; search frictions; labor market volatility; real wage rigidity;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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