Work

Long‐term Growth and Short‐term Volatility: the Labour Market Nexus*

Year: 2011

Type: article

Abstract: We study the relationship between growth and variability in a growth DSGE model with nominal rigidities and learning‐by‐doing. We show this relationship may be positive or negative depending on the source of fluctuations. A key role is played by labour market features. We find that monetary shocks volatility will generally have a negative effect on growth, while the opposite is true for fiscal and productivity shocks. These findings are consistent with empirical evidence, as data show an ambiguous relationship between output growth and its variance, but a negative relationship between output growth and nominal variability.

Source: Manchester School

DOI: 10.1111/j.1467-9957.2010.02180.x

Authors: BARBARA ANNICCHIARICO, LUISA CORRADO, ALESSANDRA PELLONI

Institutions: University of Rome Tor Vergata, University of Cambridge, University of Bergamo, University of Verona, University of Padua, University of Manchester, Sapienza University of Rome

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W1570684579

FWCI: 3.087

Cites: 78

Cited by: 8

Related to: 10