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2010-09-07Diskussionspapier DOI: 10.18452/4272
The High Sensitivity of Employment to Agency Costs
dc.contributor.authorHristov, Atanas
dc.date.accessioned2017-06-16T00:12:16Z
dc.date.available2017-06-16T00:12:16Z
dc.date.created2010-09-09
dc.date.issued2010-09-07
dc.identifier.issn1860-5664
dc.identifier.urihttp://edoc.hu-berlin.de/18452/4924
dc.description.abstractThis paper studies the interaction of financing constraints and labor market imperfections on the labor market and economic activity. My analysis builds on the agency cost framework of Carlstrom and Fuerst [1998. Agency costs and business cycles. Economic Theory, 12(3):583-597]. The aim of this article is to show that financing constraints can substantially amplify and propagate total factor productivity shocks in cyclical labor market dynamics. I find that under the Nash bargaining solution financing constraints increase substantially the volatility of wages, and in turn, amplification for the labor variables falls short of the observed volatilities in the data. Atop of this, the comovement between output and labor share is counterfactual. However, there is substantial scope for any type of wage rigidity and financing constraints to reinforce each other, and to generate the observed volatilities in the labor market, moreover, to produce a wide range of comovements between output and labor share.eng
dc.language.isoeng
dc.publisherHumboldt-Universität zu Berlin, Wirtschaftswissenschaftliche Fakultät
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/
dc.subjectUnemploymenteng
dc.subjectCredit and search frictionseng
dc.subjectLabor marketeng
dc.subject.ddc330 Wirtschaft
dc.titleThe High Sensitivity of Employment to Agency Costs
dc.typeworkingPaper
dc.identifier.urnurn:nbn:de:kobv:11-100174504
dc.identifier.doihttp://dx.doi.org/10.18452/4272
local.edoc.pages39
local.edoc.type-nameDiskussionspapier
local.edoc.container-typeseries
local.edoc.container-type-nameSchriftenreihe
local.edoc.container-year2010
dc.title.subtitleThe Relevance of Wage Rigidity
dc.identifier.zdb2195055-6
bua.series.nameSonderforschungsbereich 649: Ökonomisches Risiko
bua.series.issuenumber2010,44

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