Estimation of Dynamic Labor Demand Schedules under Rational Expectations
Journal of Political Economy
1978
open access
A dynamic linear demand schedule for labor is estimated and tested. The hypothesis of rational expectations and assumptions about the orders of the Markov processes governing technology impose over-identifying restrictions on a vector autoregression for straight-time employment, overtime employment, and the real wage. The model is estimated by the full information maximum likelihood method. The model is used as a vehicle for re-examining some of the paradoxical cyclical behavior of real wages described in the famous Dunlop-Tarshis-Keynes exchange.
- DOI
- 10.1086/260726
- Volume
- 86 (6)
- Pages
- 1009-1044
- Language
- en
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- BibTeX
- Sources
- openalex crossref