Complementarity of Labor Market Institutions, Equilibrium Unemployment and the Propagation of Business Cycles

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dc.contributor.authorWeder, M.
dc.contributor.authorBurda, M.
dc.date.issued2002
dc.descriptionThe definitive version of this article may be found at www.blackwell-synergy.com
dc.description.abstractThis paper evaluates complementarities of labor market institutions and the business cycle in the context of a stochastic dynamic general equilibrium model economy. Matching between workers and vacancies with endogenous time spent in search, Nash-bargained wages, payroll taxation, and differential support for unemployed labor in search and leisure are central aspects of the model. For plausible regions of the policy and institutional parameter space, the model exhibits more persistence than standard real business cycle models and can exhibit indeterminacy of rational expectations paths without increasing returns in production. Furthermore, labor market institutions act in a complementary fashion in generating these effects.
dc.description.statementofresponsibilityMichael C Burda and Mark Weder
dc.identifier.citationGerman Economic Review, 2002; 3(1):1-24
dc.identifier.doi10.1111/1468-0475.00049
dc.identifier.issn1465-6485
dc.identifier.issn1468-0475
dc.identifier.urihttp://hdl.handle.net/2440/41234
dc.language.isoen
dc.publisherBlackwell Publishing Ltd.
dc.source.urihttp://www.blackwell-synergy.com/links/doi/10.1111/1468-0475.00049
dc.titleComplementarity of Labor Market Institutions, Equilibrium Unemployment and the Propagation of Business Cycles
dc.typeJournal article
pubs.publication-statusPublished

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