This paper presents a new empirical regularity between the volatility of productivity growth and long-run unemployment for a given level of long-run productivity growth. A theoretical framework based on asymmetric real wage rigidities is shown to have the potential to rationalize this finding. The model tends to fit U.S. long-run unemployment better than a specification based on long-run productivity growth only, especially during the Great Moderation and the Great Recession.

Unemployment and Productivity in The Long Run: The Role of Macroeconomic Volatility / Benigno, Pierpaolo; Luca, Ricci; Paolo, Surico. - In: THE REVIEW OF ECONOMICS AND STATISTICS. - ISSN 0034-6535. - 97:3(2015), pp. 698-709. [doi:10.1162/REST_a_00508]

Unemployment and Productivity in The Long Run: The Role of Macroeconomic Volatility

BENIGNO, PIERPAOLO;
2015

Abstract

This paper presents a new empirical regularity between the volatility of productivity growth and long-run unemployment for a given level of long-run productivity growth. A theoretical framework based on asymmetric real wage rigidities is shown to have the potential to rationalize this finding. The model tends to fit U.S. long-run unemployment better than a specification based on long-run productivity growth only, especially during the Great Moderation and the Great Recession.
Unemployment, Productivity growth, Volatility.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/110192
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