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Job Reallocation, Unemployment and Hours in a New Keynesian Model
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Richard Holt
Published/Copyright:
August 7, 2008
This paper focuses on the reallocation of labour resources in a New Keynesian environment with labour market search and endogenous separations. We show that the introduction of variation in hours per worker alters the incentives for intertemporal substitution in a way that generates a more steeply downward sloping Beveridge curve and reduces the tendency to synchronize gross job flows. We find that the impact of labour supply elasticity on the slope of the Beveridge curve and the correlation of gross job flows is determined primarily by variation in the response to monetary shocks. When hours variation is suppressed, the correlation of job creation with job destruction and that of unemployment with vacancies are strongly positive in response to monetary shocks. With variation in hours both measures of reallocation take on the correct negative sign.
Keywords: job reallocation; unemployment; hours; labour market fluctuations; New Keynesian macroeconomics
Published Online: 2008-8-7
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Keywords for this article
job reallocation;
unemployment;
hours;
labour market fluctuations;
New Keynesian macroeconomics
Articles in the same Issue
- Topics Article
- The Importance of Industrial Policy in Quality-Ladder Growth Models
- The Evolution of International Output Differences (1970-2000): From Factors to Productivity
- Non-Linearities and Unit Roots in G7 Macroeconomic Variables
- Mitigating the Growth-Effects of Inflation through Financial Development
- The Dynamics of European Inflation Expectations
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- Expected Equity Returns and the Demand for Money
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- Employment Growth in the American Urban Hierarchy: Long Live Distance
- Endogenous Persistence and the Performance of Inertial Targeting Rules
- Unemployment, Imperfect Risk Sharing, and the Monetary Business Cycle
- Technological Progress and the Urbanization Process
- Convergence by Parts
- Estimating Returns to Schooling from State-Level Data: A Macro-Mincerian Approach
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