Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296332 
Year of Publication: 
2023
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 14 [Issue:] 3 [Year:] 2023 [Pages:] 897-934
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We identify the main shock driving fluctuations in long-horizon productivity expectations, consistent with theories of TFP news. The identified shock induces strong comovement patterns in output, consumption, investment, employment, and stock prices even though TFP does not change significantly for more than 2 years. A labor search model in which wages are determined by a cash-flow sharing rule, rather than the present value of match surplus, matches the observed responses to the news shock. The model also matches the empirical patterns of vacancies, labor force participation, hours, and job-finding rates. The proposed wage rule is consistent with empirical responses of wages to both anticipated and unanticipated productivity changes.
Subjects: 
News shocks
wages
labor search
business cycles
JEL: 
E24
E32
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.