scholarly journals Uncertainty and Contradiction: An Essay on the Business Cycle

2015 ◽  
Vol 49 (2) ◽  
pp. 247-264 ◽  
Author(s):  
Michalis Nikiforos
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
The Other ◽  
Financial Instability ◽  
Wage Share ◽  
Hyman Minsky ◽  
Short Run ◽  
Low Levels ◽  
The Business Cycle ◽  
The One

The paper develops a model of economic fluctuations in the medium run and their relation with the short-run macroeconomic equilibrium. The business cycle is the result of two separate forces. On the one hand, there is Harrodian instability. On the other hand, this instability is contained by the inherent contradictions of capitalism. I focus on two of these contradictions: the profit-squeeze that results from the tightening of the labor market as employment and utilization increase, and the financial instability hypothesis as formulated by Hyman Minsky. With the inclusion of overhead labor, the model can explain the U-shaped behavior of the wage share along the business cycle (wage share decreases for low levels of utilization and increases for higher levels) that prevailed in most of the post-WWII period, as well as the decrease in the wage share as utilization increases that has been observed in the most recent cycles.

Fluctuations and Rigidities in Local Labor Markets. Part 1: Theory and Evidence

1983 ◽  
Vol 15 (2) ◽  
pp. 165-185 ◽  
Author(s):  
G L Clark
Keyword(s):  
Spectral Analysis ◽  
Labor Market ◽  
Business Cycle ◽  
Labor Markets ◽  
Local Labor Markets ◽  
Hours Worked ◽  
Long Run ◽  
Short Run ◽  
The Business Cycle ◽  
Us Cities

Cyclical sensitivity in employment, wages, and hours worked are explored with reference to three industries and eleven US cities over the period 1972–1980. Conventional neoclassical discrete-exchange models of the labor market are shown to be inadequate because of marked rigidities in the patterns of short-run adjustment. Money wages are very stable, being dominated by a long-run trend, and firms tend to adjust hours worked and only then employment in the short run. There are, however, significant interregional variations in these patterns within the same industry. Spectral analysis and tests for periodicities in the patterns of residuals derived from trend-line estimates of money wages confirm a supposition that urban Phillips curves do not exist. The evidence supports the implicit notion of contract theory that continuous employer-worker relationships exist over the business cycle. The question of how useful, in general, this theory might be is left open for the present.

Reforming the Labour Market in Good and Bad Times

2018 ◽  
Author(s):  
Britta Gehrke ◽  
Enzo Weber
Keyword(s):  
Time Series ◽  
Business Cycle ◽  
Labour Market ◽  
Markov Switching ◽  
Matching Theory ◽  
Market Reforms ◽  
Structural Reforms ◽  
Labour Market Reforms ◽  
Short Run ◽  
The Business Cycle

This chapter discusses how the effects of structural labour market reforms depend on whether the economy is in expansion or recession. Based on an empirical time series model with Markov switching that draws on search and matching theory, we propose a novel identification of reform outcomes and distinguish the effects of structural reforms that increase the flexibility of the labour market in distinct phases of the business cycle. We find in applications to Germany and Spain that reforms which are implemented in recessions have weaker expansionary effects in the short run. For policymakers, these results emphasize the costs of introducing labour market reforms in recessions.

scholarly journals LABOR MARKET DYNAMICS UNDER TECHNOLOGY SHOCKS: THE ROLE OF SUBSISTENCE CONSUMPTION

2021 ◽  
pp. 1-29
Author(s):  
Sangyup Choi ◽  
Myungkyu Shim
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Developing Economies ◽  
Structural Var ◽  
Market Dynamics ◽  
Technology Shocks ◽  
Structural Factors ◽  
Long Run ◽  
Labor Market Dynamics ◽  
Short Run

This paper establishes new stylized facts about labor market dynamics in developing economies, which are distinct from those in advanced economies, and then proposes a simple model to explain them. We first show that the response of hours worked and employment to a technology shock—identified by a structural VAR model with either short-run or long-run restrictions—is substantially smaller in developing economies. We then present compelling empirical evidence that several structural factors related to the relevance of subsistence consumption across countries can jointly account for the relative volatility of employment to output and that of consumption to output. We argue that a standard real business cycle (RBC) model augmented with subsistence consumption can explain the several salient features of business cycle fluctuations in developing economies, especially their distinct labor market dynamics under technology shocks.

scholarly journals Autonomes Fahren statt Stop and Go: Vorschläge zur effektiven Gestaltung der deutschen Kurzarbeit

2019 ◽  
Vol 68 (3) ◽  
pp. 252-260
Author(s):  
Almut Balleer ◽  
Britta Gehrke ◽  
Brigitte Hochmuth ◽  
Christian Merkl
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Great Recession ◽  
Timely Manner ◽  
Rule Based ◽  
The Great Recession ◽  
Stop And Go ◽  
Time Work ◽  
The Business Cycle ◽  
Short Time

Abstract This article argues that short-time work stabilized employment in Germany substantially during the Great Recession in 2008/09. The labor market instrument acted in timely manner, as it was used in a rule-based fashion. In addition, discretionary extensions were effective due to their interaction with the business cycle. To ensure that short-time work will be effective in the future, this article proposes an automatic facilitation of the access to short-time work in severe recessions. This reduces the likelihood of a too extensive use at the wrong point in time as well as structural instead of cyclical interventions.

scholarly journals Asset Returns, the Business Cycle and the Labor Market

2013 ◽  
Vol 14 (3) ◽  
pp. 372-397 ◽  
Author(s):  
Burkhard Heer ◽  
Alfred Maußner
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Equity Premium ◽  
Working Hours ◽  
New Keynesian ◽  
Monetary Shocks ◽  
Productivity Shocks ◽  
New Keynesian Models ◽  
The Business Cycle ◽  
Sticky Wages

Abstract We review the labor market implications of recent real-business cycle and New Keynesian models that successfully replicate the empirical equity premium. We document the fact that all models reviewed in this article that do not feature either sticky wages or immobile labor between two production sectors as in Boldrin et al. (2001) imply a negative correlation of working hours and output that is not observed empirically. Within the class of Neo-Keynesian models, sticky prices alone are demonstrated to be less successful than rigid nominal wages with respect to the modeling of the labor market stylized facts. In addition, monetary shocks in these models are required to be much more volatile than productivity shocks to match statistics from both the asset and labor market.

Business Cycles and Apprenticeships

2021 ◽  
Author(s):  
Samuel Muehlemann ◽  
Stefan Wolter
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Empirical Studies ◽  
Cost Effective ◽  
Skilled Labor ◽  
Market Failures ◽  
Task Forces ◽  
Apprenticeship Training ◽  
The Business Cycle ◽  
Over Time

The economic reasons why firms engage in apprenticeship training are twofold. First, apprenticeship training is a potentially cost-effective strategy for filling a firm’s future vacancies, particularly if skilled labor on the external labor market is scarce. Second, apprentices can be cost-effective substitutes for other types of labor in the current production process. As current and expected business and labor market conditions determine a firm’s expected work volume and thus its future demand for skilled labor, they are potentially important drivers of a firm’s training decisions. Empirical studies have found that the business cycle affects apprenticeship markets. However, while the economic magnitude of these effects is moderate on average, there is substantial heterogeneity across countries, even among those that at first sight seem very similar in terms of their apprenticeship systems. Moreover, identification of business cycle effects is a difficult task. First, statistics on apprenticeship markets are often less developed than labor market statistics, making empirical analyses of demand and supply impossible in many cases. In particular, data about unfilled apprenticeship vacancies and unsuccessful applicants are paramount for assessing potential market failures and analyzing the extent to which business cycle fluctuations may amplify imbalances in apprenticeship markets. Second, the intensity of business cycle effects on apprenticeship markets is not completely exogenous, as governments typically undertake a variety of measures, which differ across countries and may change over time, to reduce the adverse effects of economic downturns on apprenticeship markets. During the economic crisis related to the COVID-19 global pandemic, many countries took unprecedented actions to support their economies in general and reacted swiftly to introduce measures such as the provision of financial subsidies for training firms or the establishment of apprenticeship task forces. As statistics on apprenticeship markets improve over time, such heterogeneity in policy measures should be exploited to improve our understanding of the business cycle and its relationship with apprenticeships.

scholarly journals Bank wholesale funding and credit procyclicality: Evidence from Korea

2013 ◽  
Vol 60 (5) ◽  
pp. 615-631 ◽  
Author(s):  
Sangjun Jeong ◽  
Hueechae Jung
Keyword(s):  
Business Cycle ◽  
Emerging Economies ◽  
Commercial Banks ◽  
Marked Effect ◽  
The Other ◽  
Financial Fragility ◽  
Credit Growth ◽  
The Business Cycle ◽  
The Relationship ◽  
Higher Sensitivity

Credit procyclicality has recently been the focus of considerable attention, but what fuels the often excessive credit growth is rarely questioned. We investigate the relationship between the composition of banks? liabilities and their credit procyclicality. After examining the macroeconomic context where banks rely increasingly on wholesale funding (WSF), we estimate the effect of WSF on the banks? credit growth using quarterly panel data for the commercial banks of Korea from 2000 to 2011. We find that a higher sensitivity of banks? WSF to the business cycle leads to an excessive response of credit growth to the business cycle, even with a low share of WSF on bank liabilities. On the other hand, we find that overseas WSF has a more marked effect on credit procyclicality, which may additionally exacerbate the financial fragility of export-led emerging economies.

Labor market of single-industry cities: modern realities

2020 ◽  
pp. 16-23
Author(s):  
Anastasia Grigorievna Vasilieva
Keyword(s):  
Labor Market ◽  
Emerging Markets ◽  
The Other ◽  
Urban Settlement ◽  
Status And Trends ◽  
Single Industry ◽  
The Status ◽  
The Russian Federation ◽  
The One ◽  
Chelyabinsk Region

The article presents the results of the investigation of a system of criteria that reflect economic content of the concept of «single-industry city» and take into account, on the one hand, the change in their role in the system of urban settlement and, on the other hand, the specific conditions and challenges of urban development in emerging markets; the outcomes of the approbation of the criteria identified for assessing the status and trends of the labor market of single-industry cities in Chelyabinsk region of the Russian Federation are presented.

The Economic and Social Value of Financial Literacy

2021 ◽  
pp. 416-436
Author(s):  
José Manuel Sánchez Santos
Keyword(s):  
Social Welfare ◽  
Empirical Evidence ◽  
National Economy ◽  
Financial Literacy ◽  
Social Value ◽  
The Other ◽  
Financial Instability ◽  
Allocation Of Resources ◽  
Financial Decisions ◽  
The One

The main objective of this chapter is to provide new insights into the economic and social value that financial literacy has for individuals and societies. Financial literacy has implications that are relevant both at a micro (especially for households) and macro-level (for the financial system and for the national economy as a whole). On the one hand, a lack of financial literacy put households a risk from making sub-optimal financial decisions and prevent them to maximize their wellbeing. On the other hand, financial literacy favors a better allocation of resources, reduces the risks associated with episodes of financial instability, and therefore, contributes to the increase of social welfare. The analysis and the empirical evidence showing the benefits (costs) of financial literacy (illiteracy) allows to conclude that policymakers have a key role to play implementing initiatives aiming to improve financial literacy of the population at all stages of life.

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