The Review of Economics and Statistics Vol. 97 No. 3 2015
Unemployment and Productivity in the Long Run: The Role of Macroeconomic Volatility
open access
Abstract
This paper presents a new empirical regularity between the volatility of productivity growth and long-run unemployment for a given level of long-run productivity growth. A theoretical framework based on asymmetric real wage rigidities is shown to have the potential to rationalize this finding. The model tends to fit U.S. long-run unemployment better than a specification based on long-run productivity growth only, especially during the Great Moderation and the Great Recession.
- DOI
- 10.1162/rest_a_00508
- Volume
- 97
- Issue
- 3
- Pages
- 698-709
- Language
- en
- Sources
- openalex crossref