scholarly journals Measuring What Employers Do about Entry Wages over the Business Cycle: A New Approach

2012 ◽  
Vol 4 (4) ◽  
pp. 36-55 ◽  
Author(s):  
Pedro S Martins ◽  
Gary Solon ◽  
Jonathan P Thomas
Keyword(s):  
Longitudinal Data ◽  
Business Cycle ◽  
Unemployment Rate ◽  
Crucial Role ◽  
New Approach ◽  
Macroeconomic Models ◽  
Cyclical Variation ◽  
Wage Cyclicality ◽  
The Business Cycle ◽  
Newly Hired

Rigidity in real hiring wages plays a crucial role in some recent macroeconomic models. But are hiring wages really so noncyclical? We propose using employer/employee longitudinal data to track the cyclical variation in the wages paid to workers newly hired into specific entry jobs. Illustrating the methodology with 1982–2008 data from the Portuguese census of employers, we find real entry wages were about 1.8 percent higher when the unemployment rate was 1 percentage point lower. Like most recent evidence on other aspects of wage cyclicality, our results suggest that the cyclical elasticity of wages is similar to that of employment. (JEL E24, E32, J31, J64)

scholarly journals Real Wages and the Business Cycle: Accounting for Worker, Firm, and Job Title Heterogeneity

2012 ◽  
Vol 4 (2) ◽  
pp. 133-152 ◽  
Author(s):  
Anabela Carneiro ◽  
Paulo Guimarães ◽  
Pedro Portugal
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Unemployment Rate ◽  
Real Wages ◽  
Labor Market Conditions ◽  
Business Cycle Accounting ◽  
Point Increase ◽  
Job Title ◽  
The Business Cycle ◽  
Newly Hired

Using a longitudinal matched employer-employee dataset for Portugal over the 1986–2007 period, this study analyzes the wage responses to aggregate labor market conditions for newly hired workers and existing workers within the same firm. Accounting for worker, firm, and job title heterogeneity, the data support the hypothesis that entry wages are more procyclical than wages of stayers. A one point increase in the unemployment rate decreases wages of newly hired workers within a given firm-job title by around 2.7 percent and by 2.2 percent for stayers within the same firm-job title. Finally, the results reveal a one-for-one wage response to changes in labor productivity. (JEL: E24, E32, J64)

Notes from the Editors, February 2020

2020 ◽  
pp. c2-64
Author(s):  
The Editors
Keyword(s):  
Business Cycle ◽  
Unemployment Rate ◽  
Full Employment ◽  
Wage Growth ◽  
The Past ◽  
Labor Statistics ◽  
The Business Cycle ◽  
Bureau Of Labor Statistics ◽  
The U.S ◽  
New Jobs

buy this issue According to the U.S. Bureau of Labor Statistics, the U.S. economy is experiencing an unemployment rate that is at a fifty-year low. Yet, wage growth continues to be weak, with continuing wage stagnation even at the peak of the business cycle. A major and largely undertheorized reason for the sluggish wages in a period of seeming full employment is to be found in the fact that the new jobs being created by the economy do not measure up to those of the past in terms of weekly wages and hours, or in the degree to which they support households or even individuals.

New Estimates of Prewar Gross National Product and Unemployment

1986 ◽  
Vol 46 (2) ◽  
pp. 341-352 ◽  
Author(s):  
Christina Romer
Keyword(s):  
United States ◽  
Business Cycle ◽  
Unemployment Rate ◽  
Serial Correlation ◽  
Gross National Product ◽  
The United States ◽  
National Product ◽  
Okun’S Law ◽  
Okun's Law ◽  
The Business Cycle

The paper examines in detail revised estimates of unemployment and gross national product for the United States before 1929. It first discusses the nature of the revisions to each series and contrasts the assumptions underlying the new data with those underlying the Kuznets GNP series and the Lebergott unemployment rate series. It then examines the business cycle properties of the new prewar estimates. In analyzes the volatility and serial correlation properities of the new macroeconomic series and investigates the Okun's Law relationship between unemployment and GNP, concluding with an evaluation of the assumptions underlying the old and new data.

scholarly journals Labor Market Indicator for Colombia

2021 ◽  
pp. 1-32
Author(s):  
Deicy J. Cristiano-Botia ◽  
Manuel Dario Hernandez-Bejarano ◽  
Mario A. Ramos-Veloza
Keyword(s):  
Time Series ◽  
Labor Market ◽  
Business Cycle ◽  
Unemployment Rate ◽  
Economic Activity ◽  
Growth Cycle ◽  
Current State ◽  
The Business Cycle ◽  
Market Indicator

Although the unemployment rate is traditionally used to diagnose the current state of the labor market, this indicator does not reflect the existence of asymmetries, mobility costs, and rigidities which impede labor to freely flow over the business cycle. Thus, to get a better portrait of the momentum, we construct the Labor Market Indicator (LMI) focusing on the cyclical similarities of eighteen time series from the Colombian household, industrial, and opinion surveys between 2001 and 2019. Our indicator summarizes the growth cycle of the labor market and its evolution is closely related to the output and unemployment GAP. This indicator is useful for policy analysis as it is useful to forecast headline inflation, it also complements the diagnosis of the current momentum of the labor market, the general economic activity, and the characterization of economic phases and turning points.

scholarly journals Predicting turning points in the South African economy

2003 ◽  
Vol 6 (2) ◽  
pp. 289-303 ◽  
Author(s):  
Elna Moolman
Keyword(s):  
Business Cycle ◽  
South African ◽  
Turning Points ◽  
Economic Indicator ◽  
Macroeconomic Model ◽  
The South ◽  
Macroeconomic Models ◽  
Market Participants ◽  
The Business Cycle

Despite the existence of macroeconomic models and complex business cycle indicators, it would be beneficial to policymakers and market participants if they could look at one well-chosen indicator in predicting business cycle turning points. If one indicator accurately predicts business cycle turning points, it provides an easy way to confirm the predictions of macroeconomic models, or it can eliminate the need for a macroeconomic model if the interest is in the turning points and not in the levels of the business cycle. The objective of this paper is to investigate whether turning points of the South African business cycle can be predicted with only one economic indicator.

Modelling cyclical variation in the cost pass-through: a regime-dependent approach

2020 ◽  
Vol 67 (2) ◽  
pp. 97-113
Author(s):  
Karolina Konopczak
Keyword(s):  
Business Cycle ◽  
Cyclical Variation ◽  
Business Cycle Fluctuations ◽  
Industrial Sectors ◽  
Labour Costs ◽  
Cyclical Behaviour ◽  
The Business Cycle ◽  
Pass Through ◽  
The Cost ◽  
Markup Adjustment

In this study a regime-dependent ARDL model is developed in order to investigate how labour costs feed through into prices conditional on the business cycle position. Its estimates enable inference on the cyclical behaviour of markups. The proposed methodology is applied to the Polish industrial sectors. The obtained estimates point to procyclicality as the prevailing pattern of markup adjustment. Thus, overall markups in the Polish industry seem to have a mitigating effect on business cycle fluctuations. The degree of procyclicality seems, however, to be positively correlated with the degree of the industry’s competitiveness.

scholarly journals The Business Cycle, Inflation, and Unemployment Rate Nexus: An Empirical Approach

2021 ◽  
Vol 13 (10) ◽  
pp. 110
Author(s):  
Tito Belchior Silva Moreira ◽  
Michel Constantino ◽  
George Henrique de Moura Cunha ◽  
Paulo Roberto Pires de Sousa ◽  
Luciano Balbino dos Santos
Keyword(s):  
Monetary Policy ◽  
Business Cycle ◽  
Unemployment Rate ◽  
Inflation Rate ◽  
Phillips Curve ◽  
Trade Off ◽  
Causality Tests ◽  
Granger Causality Tests ◽  
The Business Cycle ◽  
American Economy

This paper revisits the main assumption regarding the original Phillips curve regarding the American economy, in which one assumes that the unemployment rate causes an inflation rate. In this context, this paper aims to evaluate if the variance of the inflation rate affects the unemployment rate and, besides, if there is a one-way causality from the variance of the inflation rate to the unemployment rate. Based on quarterly time series from 1959:04 to 2019:04 the empirical results show, via OLS and GMM methods, that the monetary policy affects the business cycle, and, in turn, the business cycle impacts the unemployment rate. Hence, the monetary policy affects indirectly the unemployment rate via the business cycle. On the other hand, the variance of the inflation rate contributes to an increase in the unemployment rate, consequently, there isn’t a trade-off between the unemployment rate and the variance of the inflation rate. Moreover, there is a one-way causality from the variance of the inflation rate to the unemployment rate. This is the contribution of this paper. At last, based on the Phillips curve, one expects that the unemployment rate causes the inflation rate. However, the Granger causality tests display a two-way causality relation between both variables.

Post-Keynesian Macroeconomic Models

2014 ◽  
pp. 61-95
Keyword(s):  
Business Cycle ◽  
Financial Markets ◽  
Full Employment ◽  
Aggregate Demand ◽  
Financial Sector ◽  
Economic Equilibrium ◽  
Productive Capacity ◽  
Productivity Analysis ◽  
Macroeconomic Models ◽  
The Business Cycle

The idea that the financial sector can amplify the business cycle dates back to the early 1900s. The main focus of finance and growth literature is the way in which financial markets influence the main drivers of growth (such as investment and savings) and the fluctuations of business cycle indirectly, via their impact on the firms and consumers. Keynesians and post-Keynesians believe that aggregate demand is responsible for achieving full employment and economic equilibrium, and investment is placed at the centre stage to stimulate aggregate demand. Classical theorists favour equilibrium with equalised profit rates, process of production, and full utilisation of productive capacity. Accordingly, this chapter extensively discusses the post-Keynesian literature in investment and productivity analysis, and their approaches to macroeconomic modelling.

Erratum

ILR Review ◽  
1981 ◽  
Vol 34 (4) ◽  
pp. 595-595
Keyword(s):  
Business Cycle ◽  
Unemployment Rate ◽  
Bargaining Theory ◽  
Previous Issue ◽  
Strike Activity ◽  
The Business Cycle

The article, “Bargaining Theory, Inflation, and Cyclical Strike Activity,” by Bruce E. Kaufman, which appeared in the previous issue of the Review (Vol.34, No. 3, April 1981) contained a printer's error. The second full sentence in the second column on page 345 should have read as follows: “Thus our model predicts that including the unemployment rate will cause the peak of the strike cycle to shift forward in time, relative to what it would have been on the basis of inflation alone, while at the trough of the business cycle both inflation and unemployment will work to cause the low point in strikes to follow that of the business cycle.”

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