ENDOGENOUS LABOR MARKET CYCLES

• 成果类型: Article
• 署名作者: Li, Yunan; Wang, Cheng
• 署名单位: City University of Hong Kong; Fudan University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12553
• 发表日期: 2022
• 页码: 849-881
• 关键词: equilibrium unemployment; financial intermediation; moral-hazard; BUSINESS; models

摘要

We offer a new way of thinking about labor market fluctuations. In a perfectly stationary physical environment of the labor market, moral hazard and competition in long-term contracting generate cycles in market tightness, which may induce job creation and destruction, and two-period and longer cycles in wages and employment. Long-term contracts use termination as an incentive device. Underlying the cycles is an intertemporal negative externality. In prescribing a larger (smaller) probability of termination, each current period long-term contract puts pressure on all next period long-term contracts to prescribe a smaller (larger) probability of termination, by affecting the tightness of the market for long-term contracts in the next period.