Firm dynamics with frictional product and labor markets

  • We analyze the joint dynamics of prices, productivity, and employment across firms, building a dynamic equilibrium model of heterogeneous firms who compete for workers and customers in frictional labor and product markets. Using panel data on prices and output for German manufacturing firms, the model is calibrated to evaluate the quantitative contributions of productivity and demand for the labor market. Product market frictions decisively dampen the firms' employment adjustments to productivity shocks. We further analyze the impact of aggregate shocks to the first and second moments of productivity and demand and relate them to business-cycle features in our data.

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Author:Leo Kaas, Bihemo Kimasa
URN:urn:nbn:de:hebis:30:3-615499
DOI:https://doi.org/10.1111/iere.12510
ISSN:1468-2354
Parent Title (English):International economic review
Publisher:Wiley-Blackwell
Place of publication:Malden, Mass.
Document Type:Article
Language:English
Date of Publication (online):2021/03/05
Date of first Publication:2021/03/05
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2021/07/26
Volume:2021
Issue:Online Version of Record before inclusion in an issue
Page Number:37
First Page:1
Last Page:37
HeBIS-PPN:48471080X
Institutes:Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Sammlungen:Universit├Ątspublikationen
Licence (German):License LogoCreative Commons - Namensnennung 4.0