Trading down and the business cycle

• 成果类型: Article; Proceedings Paper
• 署名作者: Jaimovich, Nir; Rebelo, Sergio; Wong, Arlene
• 署名单位: University of Zurich; Northwestern University; National Bureau of Economic Research; Center for Economic & Policy Research (CEPR); Princeton University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.01.026
• 发表日期: 2019
• 页码: 96-121
• 关键词: recessions; Quality choice; business cycles

摘要

We document two facts. First, during the Great Recession, consumers traded down in the quality of the goods and services they consumed. Second, the production of low-quality goods is less labor intensive than that of high-quality goods. When households traded down, labor demand fell, increasing the recession's severity. We find that the trading-down phenomenon accounts for a substantial fraction of the decline in U.S. employment in the recent recession. We show that embedding quality choice in a business-cycle model improves the model's amplification and comovement properties. (C) 2019 Elsevier B.V. All rights reserved.