Year: 1994
Type: article
Abstract: We introduce procyclical labor and capital utilization, as well as costs of rapidly increasing employment, into a business-cycle model. Plausible variations in factor utilization enable us to explain observed variability of real GNP with considerably smaller economy-wide disturbances. The costs of adjustment create very interesting and realistic lead and lag relationships: employment does not peak until a full quarter after output; workweeks, effort, capital utilization and productivity all sharply lead the business cycle.
Source: Journal of Monetary Economics
Authors: Mark Bils, Jang-Ok Cho
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2066535795