| Description |
1 online resource (37 pages) : color illustrations |
| Series |
IMF working paper ; WP/14/77 |
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IMF working paper ; WP/14/77.
|
| Contents |
Cover; Contents; I. Introduction; Tables; Table 1. Wealth losses and joblessness of recoveries; Figures; Figure 1. Employment dynamics in all post-war recessions in the United States; Figure 2. Total nonfarm employment dynamics during Big Five financial crises; II. Model; A. The household; B. Firms; C. Search in the labor market; D. Equilibrium; III. Closing the model; A. Steady state vs. dynamic indeterminancy; IV. Estimation; A. Overview; B. Priors; C. Posterior estimates; Table 2. Prior distributions of parameters of the model; Table 3. Posterior distributions of parameters of the model |
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v. Taking the model to the dataFigure 3. Posterior distributions; A. Model performance; Table 4. Summary statistics of the simulated and the real data; B. The mechanism of the model; Figure 4. Simulated series and the actual data in wage units; C. Case study: the Great Recession; Figure 5. Simulated series with both shocks and simulated series with belief shocks only; Figure 6. Simulated series with both shocks and simulated series with TFP shocks only; Figure 7. RBC model generated series and the actual data |
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Figure 8. The benchmark model generated series using TFP shocks only and the actual dataD. Impulse response functions; Figure 9. The benchmark model generated series using both TFP shocks and belief shocks against the actual data; Figure 10. Impulse response functions to 1% negative TFP shock; VI. Conclusion; References |
| Summary |
"This paper develops and estimates a general equilibrium rational expectations model with search and multiple equilibria where aggregate shocks have a permanent effect on the unemployment rate. If agents' wealth decreases, the unemployment rate increases for a potentially indefinite period. This makes unemployment rate dynamics path dependent as in Blanchard and Summers (1987). I argue that this feature explains the persistence of the unemployment rate in the U.S. after the Great Recession and over the entire postwar period"--Abstract |
| Notes |
"Institute for Capacity Development"--Page 2 of pdf |
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"May 2014"--Page 2 of pdf |
| Bibliography |
Includes bibliographical references |
| Notes |
Online resource; title from pdf title page (IMF.org Web site, viewed June 4, 2014) |
| Subject |
Hysteresis (Economics)
|
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Unemployment.
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Business cycles
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Business cycles
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Hysteresis (Economics)
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Unemployment
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| Form |
Electronic book
|
| Author |
International Monetary Fund. Institute for Capacity Development, issuing body.
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| ISBN |
9781484372579 |
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1484372573 |
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