Does Labor Market Flexibility Stabilize an Economy?
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
I estimate two behavioral functions relating to labor market flexibility, the employment expansion function and the real wage Phillips curve. Results show that labor hoarding was not weakened during the Great Moderation, suggesting that employment flexibility did not play a major role in stabilizing the macroeconomy during that period. On the other hand, estimation of the real wage Phillips curve indicates that real wages have become more flexible since 1984. These results suggest that employment flexibility destabilizes an economy whereas real wage flexibility stabilizes it, bringing into question the views which propose weakening employment protections as an important remedy mitigating macroeconomic shock. Structural VAR analysis suggests that instability in the labor market caused by employment flexibility is extended to instability in the goods market. As to the source of the stabilizing force caused by real wage flexibility, it suggests that variation in real wage functions as an automatic stabilizer.
Abstract
I estimate two behavioral functions relating to labor market flexibility, the employment expansion function and the real wage Phillips curve. Results show that labor hoarding was not weakened during the Great Moderation, suggesting that employment flexibility did not play a major role in stabilizing the macroeconomy during that period. On the other hand, estimation of the real wage Phillips curve indicates that real wages have become more flexible since 1984. These results suggest that employment flexibility destabilizes an economy whereas real wage flexibility stabilizes it, bringing into question the views which propose weakening employment protections as an important remedy mitigating macroeconomic shock. Structural VAR analysis suggests that instability in the labor market caused by employment flexibility is extended to instability in the goods market. As to the source of the stabilizing force caused by real wage flexibility, it suggests that variation in real wage functions as an automatic stabilizer.
참고문헌 (40)
- Labor Market Institutions and the Business Cycle: Unemployment Rigidities vs. Real Wage Rigidities, "Abbritti, M.", European Central Bank, ~, pp.European Central Bank Working Paper Series, (No. 1183) (2010)
- Barbosa-Filho, N. H., "Distributive and Demand Cycles in the US Economy : A Structuralist Goodwin Model", Metroeconomica, 57(3), pp.389~411 (2006)
- Basu, D., "Class Struggle and Economic Fluctuations : VAR Analysis of the Post-war U. S. Economy", International Review of Applied Economics, 27(5), pp.575~596 (2013)
- Blanchard, O., "A Traditional Interpretation of Macroeconomic Fluctuations", American Economic Review, 79(5), pp.1146~1164 (1989)
- The State of Macro, "Blanchard, O.", NBER, ~, pp.NBER Working Paper Series, (14259) (2008)
- Blanchard, O., "Wage Dynamics: Reconciling Theory and Evidence", American Economic Review Papers and Proceedings, 89(2), pp.69~74 (1999)
- What Explains the German Labor Market Miracle in the Great Recession?, "Burda, M. C.", NBER, ~, pp.NBER Working Paper Series, (17187) (2011)
- Labor Hoarding and the Business Cycle, "Burnside, C.", NBER, ~, pp.BER Working Paper Series, (3556) (1990)
- Chirinko, R. S., "Economic Fluctuations, Market Power, and Returns to Scale : Evidence from Firm-Level Data", Journal of Applied Econometrics, 9(1), pp.47~69 (1994)
- Cogley, T., "Output Dynamics in Real-Business-Cycle Models", American Economic Review, 85(3), pp.492~511 (1995)
- Enders, W., "Applied Econometric Time Series" (2010), Wiley
- Farmer, R. E. A., "The Macroeconomics of Self-fulfilling Prophecies" (1993), MIT Press
- Farmer, R. E. A., "Real Business Cycles and the Animal Spirits Hypothesis", Journal of Economic Theory, 63(1), pp.42~72 (1994)
- Flaschel, P., "Quantitative and Empirical Analysis of Nonlinear Dynamic Macromodels, Contributions to Economic Analysis" (2006), Elsevier
- Fox, J., "An R Companion to Applied Regression" (2010), SAGE Publications
- Fujita, S., "A Closer Look at the German Labor Market Miracle", Business Review, 4 (2014)
- The Return of the Wage Phillips Curve, "Galí, J.", NBER, ~, pp.NBER Working Paper Series, (15758) (2010)
- Galí, J., "On the Sources of the Great Moderation", American Economic Journal: Macroeconomics, 1(1), pp.26~57 (2009)
- The Vanishing Procyclicality of Labor Productivity, "Galí, J.", IZA, ~, pp.IZA Discussion Paper, No. 5099 (2010)
- Gallegati, M., "The US Wage Phillips Curve across Frequencies and over Time", Oxford Bulletin of Economics and Statistics, 73(4), pp.489~508 (2011)
- Goldstein, J. P., "The Cyclical Profit Squeeze: A Marxian Microfoundation", Review of Radical Political Economics, 17(1-2), pp.103~128 (1985)
- Gordon, R., "The Time-varying NAIRU and Its Implications for Economic Policy", Journal of Economic Perspectives, 11, pp.11~32 (1997)
- Greene, W. H., "Econometric Analysis" (2018), Pearson
- Haskel, J., "Price, Marginal Cost and the Business Cycle", Oxford Bulletin of Economics and Statistics, 57(1), pp.25~41 (1995)
- Kalecki, M., "Political Aspects of Full Employment", The Political Quarterly, 14(4), pp.322~330 (1943)
- Kim, S., "Exchange Rate Anomalies in the Industrial Countries : A Solution with A Structural VAR Approach", Journal of Monetary Economics, 45, pp.561~586 (2000)
- Lown, C. S., "Is There An Inflation Puzzle?", Reserve Bank of New York Economic Policy Review, pp.51~69 (1997)
- Morrison, C. J., "The Cyclical Nature of Markups in Canadian Manufacturing : A Production Theory Approach", Journal of Applied Econometrics, 9(3), pp.269~282 (1994)
- Myatt, A., "On the Non-existence of a Natural Rate of Unemployment and Kaleckian Underpinnings to the Phillips Curve", Journal of Post Keynesian Economics, 8, pp.447~462 (1986)
- Nekarda, C. J., "The Cyclical Behavior of the Price-Cost Markup", American Economic Journal : Macroeconomics, 3(1), pp.36~59 (2011)
- OECD, "Implementing the OECD Jobs Strategy : Member Countries'Experience" (1997), OECD
- Oh, J., "Macroeconomic Stability in a Flexible Labor Market", Metroeconomica, 69(3), pp.655~680 (2018)
- Pacella, A., "The Effects of Labour Market Flexibility in the Monetary Theory of Production", Metroeconomica, 59(4), pp.608~632 (2008)
- Rowthorn, R. E., "Conflict, Inflation and Money", Cambridge Journal of Economics, 1(3), pp.215~239 (1977)
- Sims, C., "Macroeconomics and Reality", Econometrica, 48, pp.1~49 (1980)
- Skott, P., "Effective Demand, Class Struggle and Cyclical Growth", International Economic Review, 30(1), pp.231~247 (1989)
- Skott, P., "Growth Cycles with or without Price Flexibility", Review of Keynesian Economics, 3(3), pp.374~386 (2015)
- Skott, P., "An Empirical Evaluation of Three Post-Keynesian Models", European Journal of Economics and Economic Policies : Intervention, 9(2), pp.277~307 (2012)
- Stiroh, J. K., "Volatility Accounting : A Production Perspective on Increased Economic Stability", Journal of European Economic Association, 7, pp.671~696 (2009)
- The Empirical Relevance of Goodwin's Business Cycle Model for the U.S. Economy, "Tarassow, A.", Munich Personal RePEc Archive, ~, pp.Munich Personal RePEc Archive Paper No. 22271 (2010)