Labor force participation, interest rate shocks, and unemployment dynamics in emerging economies

• 成果类型: Article
• 署名作者: Shapiro, Alan Finkelstein
• 署名单位: Tufts University
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2018.03.003
• 发表日期: 2018
• 页码: 346-374
• 关键词: Emerging economies; business cycles; Unemployment volatility; search frictions; labor force participation

摘要

Emerging economies (EMEs) have highly volatile unemployment and real wages. Standard models with interest rate shocks can generate higher unemployment volatility, but still fall quantitatively short of matching the empirical volatility of unemployment. A small open economy search model with endogenous participation and self-employment a feature of EMEs generates 90 percent of the volatility of unemployment in the data, highly volatile wages, and quantitatively-consistent cyclical aggregate dynamics amid productivity and interest rate shocks of plausible magnitudes. Endogenous participation amplifies shocks and plays a critical role in overcoming a key limitation of standard search models for EMEs.