An Estimated New-Keynesian Model with Unemployment as Excess Supply of Labor

Miguel Casares, Antonio Moreno () and Jesús Vázquez ()
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Jesús Vázquez: Departamento FAE II, Universidad del País Vasco
Authors registered in the RePEc Author Service: Jesús Vázquez

No 01/12, Faculty Working Papers from School of Economics and Business Administration, University of Navarra

Abstract: Wage stickiness is incorporated to a New-Keynesian model with variable capital in a way that generates endogenous unemployment fluctuations as the log difference between aggregate labor supply and aggregate labor demand. After estimation with U.S. data, the implied second-moment statistics of the unemployment rate provide a reasonable match with those observed in the data. Our results also show that wage-push shocks, demand shifts and monetary policy shocks are the three major determinants of unemployment fluctuations. Compared to an estimated canonical DSGE model without unemployment: wage stickiness is higher, labor supply elasticity is lower, the slope of the New-Keynesian Phillips curve is flatter, and the importance of technology innovations on output growth variability increases.

Keywords: sticky wages; unemployment; business cycles; New-Keynesian models. (search for similar items in EconPapers)
JEL-codes: C32 E30 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2012-07-30
New Economics Papers: this item is included in nep-lab and nep-mac
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: An estimated New-Keynesian model with unemployment as excess supply of labor (2014)
Working Paper: An Estimated New-Keynesian Model with Unemployment as Excess Supply of Labor (2010)
Working Paper: An Estimated New-Keynesian Model with Unemployment as Excess Supply of Labor (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:una:unccee:wp0112

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