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Investment-Specific Shocks and Cyclical Fluctuations in a Frictional Labor Market

Toledo, Manuel, Silva Becerra, Jose I. (2010) Investment-Specific Shocks and Cyclical Fluctuations in a Frictional Labor Market. B.E. Journal of Macroeconomics, 10 (1). pp. 1-39. ISSN 1935-1690. (doi:10.2202/1935-1690.1654) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:40241)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
http://dx.doi.org/10.2202/1935-1690.1654

Abstract

This paper studies the role of investment-specific shocks as an amplification mechanism of labor market fluctuations. We first show evidence suggesting that after a fall in the relative price of new equipment, not only do investment and output increase but firms also post more vacancies, hours worked increase and unemployment falls. Moreover, we study the quantitative impact of investment-specific shocks on the labor market by incorporating them in a Real Business Cycle model with search and matching frictions. We find that these shocks have a significant amplification effect on labor market fluctuations, increasing the volatility of unemployment, vacancies and total hours more than twofold

Item Type: Article
DOI/Identification number: 10.2202/1935-1690.1654
Additional information: number of additional authors: 1;
Uncontrolled keywords: investment-specific shocks; labor market volatility; business cycles; vacancies; unemployment; capacity utilization
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Stewart Brownrigg
Date Deposited: 07 Mar 2014 00:05 UTC
Last Modified: 29 May 2019 12:21 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/40241 (The current URI for this page, for reference purposes)
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