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The vanishing procyclicality of labor productivity
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Galí, Jordi and Van Rens, Thijs (2020) The vanishing procyclicality of labor productivity. The Economic Journal . ueaa065. doi:10.1093/ej/ueaa065 (In Press)
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WRAP-Vanishing-procyclicality-labor-productivity-Rens-2020.pdf - Accepted Version - Requires a PDF viewer. Available under License Creative Commons Attribution 4.0. Download (508Kb) | Preview |
Official URL: https://doi.org/10.1093/ej/ueaa065
Abstract
We document two changes in postwar US macroeconomic dynamics: the procyclicality of labour productivity vanished, and the relative volatility of employment rose. We propose an explanation for these changes that is based on reduced hiring frictions due to improvements in information about the quality of job matches and the resulting decline in turnover. We develop a simple model with hiring frictions and variable effort to illustrate the mechanisms underlying our explanation. We show that our model qualitatively and quantitatively matches the observed changes in business cycle dynamics.
| Item Type: | Journal Article | |||||||||||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor | |||||||||||||||
| Divisions: | Faculty of Social Sciences > Economics | |||||||||||||||
| Library of Congress Subject Headings (LCSH): | Labor productivity -- United States, Wages and labor productivity -- United States, Business cycles -- Econometric models | |||||||||||||||
| Journal or Publication Title: | The Economic Journal | |||||||||||||||
| Publisher: | Oxford University Press | |||||||||||||||
| ISSN: | 0013-0133 | |||||||||||||||
| Official Date: | 19 May 2020 | |||||||||||||||
| Dates: |
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| Date of first compliant deposit: | 30 January 2020 | |||||||||||||||
| Article Number: | ueaa065 | |||||||||||||||
| DOI: | 10.1093/ej/ueaa065 | |||||||||||||||
| Status: | Peer Reviewed | |||||||||||||||
| Publication Status: | In Press | |||||||||||||||
| Access rights to Published version: | Open Access | |||||||||||||||
| Copyright Holders: | © 2020 Royal Economic Society. Published by Oxford University Press on behalf of Royal Economic Society. | |||||||||||||||
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