Replication data for: Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Comment
Principal Investigator(s): View help for Principal Investigator(s) Shuhei Takahashi
Version: View help for Version V1
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LICENSE.txt | text/plain | 14.6 KB | 10/11/2019 06:05:PM |
Project Citation:
Takahashi, Shuhei. Replication data for: Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Comment. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112762V1
Project Description
Summary:
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Chang and Kim (2007) develop an incomplete asset markets
model incorporating discrete labor supply and idiosyncratic labor
productivity. Their results resolve long-standing puzzles for business
cycle models. Specifically, they produce a low correlation between
aggregate hours worked and labor productivity (0.23) and a labor
wedge with 76 percent the volatility of output. I show that these
results arise from errors in their computational method. I resolve
their model using a corrected method and find a strong, positive
correlation between hours and productivity (0.80). Fluctuations in
the labor wedge decrease to 24 percent of those in output.
Scope of Project
JEL Classification:
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D31 Personal Income, Wealth, and Their Distributions
E32 Business Fluctuations; Cycles
J22 Time Allocation and Labor Supply
J24 Human Capital; Skills; Occupational Choice; Labor Productivity
J31 Wage Level and Structure; Wage Differentials
D31 Personal Income, Wealth, and Their Distributions
E32 Business Fluctuations; Cycles
J22 Time Allocation and Labor Supply
J24 Human Capital; Skills; Occupational Choice; Labor Productivity
J31 Wage Level and Structure; Wage Differentials
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