Replication data for: Convergence in Macroeconomics: The Labor Wedge
Principal Investigator(s): View help for Principal Investigator(s) Robert Shimer
Version: View help for Version V1
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MAC2008-0035_data | 10/12/2019 07:08:PM | ||
LICENSE.txt | text/plain | 14.6 KB | 10/12/2019 03:08:PM |
Project Citation:
Shimer, Robert. Replication data for: Convergence in Macroeconomics: The Labor Wedge. Nashville, TN: American Economic Association [publisher], 2009. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114039V1
Project Description
Summary:
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I review research on the behavior of the labor wedge, the ratio
between the marginal rate of substitution of consumption for leisure
and the marginal product of labor. According to competitive,
market-clearing macroeconomic models, the ratio is easy to measure
and should be equal to the sum of consumption and labor taxes.
The observation that the wedge is higher in continental Europe than
in the United States has proved useful for understanding the extent
to which taxes can explain differences in labor market outcomes.
The observation that the ratio rises during recessions suggests some
failure of competitive, market-clearing macroeconomic models at
business cycle frequencies. The latter observation has guided recent
research, including work on sticky wage models and job search models.
(JEL E24, E32, J64)
Scope of Project
JEL Classification:
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E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E32 Business Fluctuations; Cycles
J64 Unemployment: Models, Duration, Incidence, and Job Search
E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E32 Business Fluctuations; Cycles
J64 Unemployment: Models, Duration, Incidence, and Job Search
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