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An Estimated New-Keynesian Model with Unemployment as Excess Supply of Labor

Author

Listed:
  • Miguel Casares

    () (Departamento de Economía, Universidad Pública de Navarra)

  • Antonio Moreno

    () (Facultad de Ciencias Económicas y Empresariales, Universidad de Navarra)

  • Jesús Vázquez

    () (Departamento FAE II, Universidad del País Vasco)

Abstract

As one alternative to search frictions, wage stickiness is introduced in a New-Keynesian model to generate endogenous unemployment fluctuations due to mismatches between labor supply and labor demand. The effects on an estimated New-Keynesian model for the U.S. economy are: i) the Calvo-type probability on wage stickiness rises, ii) the labor supply elasticity falls, iii) the implied second-moment statistics of the unemployment rate provide a reasonable match with those observed in the data, and iv) wage-push shocks, demand shifts and monetary policy shocks are the three major determinants of unemployment fluctuations.

Suggested Citation

  • Miguel Casares & Antonio Moreno & Jesús Vázquez, 2010. "An Estimated New-Keynesian Model with Unemployment as Excess Supply of Labor," Faculty Working Papers 09/10, School of Economics and Business Administration, University of Navarra.
  • Handle: RePEc:una:unccee:wp0910
    as

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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. He Chen & Jun-ichi Inoue, 2013. "Statistical Mechanics of Labor Markets," Papers 1309.5156, arXiv.org.
    2. MATSUMAE Tatsuyoshi & HASUMI Ryo, 2016. "Impacts of Government Spending on Unemployment: Evidence from a Medium-scale DSGE Model(in Japanese)," ESRI Discussion paper series 329, Economic and Social Research Institute (ESRI).
    3. Mina Mahmoudi & Mark Pingle, 2018. "A Growth Model with Unemployment," Papers 1806.04228, arXiv.org.
    4. He Chen & Jun-ichi Inoue, 2013. "Dynamics of probabilistic labor markets: statistical physics perspective," Papers 1309.5158, arXiv.org.
    5. LG Deidda & J.E. Galdon-Sanchez & M. Casares, 2016. "Loan production and monetary policy," Working Paper CRENoS 201612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    6. Mikel Casares & Jesús Vázquez, 2016. "Why are labor markets in Spain and Germany so different?," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 1602, Departamento de Economía - Universidad Pública de Navarra.
    7. Tahir Mahmood & Amjid Ali & Noureen Akhtar & Muhammad Iqbal & Sadia Qamar & Hafiz Zafar Nazir & Nasir Abbas & Iram Sana, 2014. "Determinants of Unemployment In Pakistan: A Statistical Study," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 4(12), pages 1163-1175, December.

    More about this item

    Keywords

    sticky wages; unemployment; business cycles; New-Keynesian models;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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