This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window
Open in New Tab
Open in same window
American Economic Review: Vol. 97 No. 5 (December 2007)
AER Volume. 97, Issue 5 | 
Previous ArticleNext Article
Sign up for Email Alerts Follow us on Twitter
AER Forthcoming Articles
Full-text Article
Download Data Set (176.12 KB)
Previous ArticleNext Article
Expand
Quick Tools:
Print Article Summary Email Link to this Article Export CitationSign up for Email Alerts Follow us on Twitter
Explore:
AER Forthcoming Articles
Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations
Article Citation
Chang, Yongsung, and
Sun-Bin Kim. 2007. "Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations."
American Economic Review,
97(5): 1939-1956.
DOI: 10.1257/aer.97.5.1939
DOI: 10.1257/aer.97.5.1939
Abstract
We demonstrate that aggregate employment and consumption can increase without a corresponding movement in productivity in a model with heterogeneous agents where the only aggregate disturbance is a productivity shock. The interaction between incomplete capital markets and indivisible labor results in a low employment-productivity correlation and creates a time-varying wedge between the marginal rate of substitution (for commodity consumption and hours) and productivity. Our results caution against viewing the measured wedge as an inefficiency due to a failure of labor-market clearing or as a fundamental driving force behind business cycles. (JEL D31, E32, J22, J24, J31)
Article Full-Text Access
Full-text Article
Additional Materials
Download Data Set (176.12 KB)
Authors
Chang, Yongsung
Kim, Sun-Bin
Kim, Sun-Bin
