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Resurrecting the Role of the Product Market Wedge in Recessions

Bils, Mark Joseph; Klenow, Peter J.; Malin, Benjamin A. - National Bureau of Economic Research (NBER) - 2014

Employment and hours appear far more cyclical than dictated by the behavior of productivity and consumption. This puzzle has been labeled "the labor wedge" -- a cyclical wedge between the marginal product of labor and the marginal rate of substitution of consumption for leisure. The wedge can be...

Persistent link: https://www.econbiz.de/10010950823

Heterogeneity and Cyclical Unemployment

Bils, Mark Joseph; Chang, Yongsung; Kim, Sun-Bin - National Bureau of Economic Research (NBER) - 2009

We model worker heterogeneity in the rents from being employed in a Diamond-Mortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations in separations and unemployment. We find...

Persistent link: https://www.econbiz.de/10005079159

Comparative Advantage and Unemployment

Bils, Mark Joseph; Chang, Yongsung; Kim, Sun-Bin - National Bureau of Economic Research (NBER) - 2009

We model unemployment allowing workers to differ by comparative advantage in market work. Workers with comparative advantage are identified by who works more hours when employed. This enables us to test the model by grouping workers based on their long-term wages and hours from panel data. The...

Persistent link: https://www.econbiz.de/10004992024

Comparative Advantage in Cyclical Unemployment

Bils, Mark Joseph; Chang, Yongsung; Kim, Sun-Bin - National Bureau of Economic Research (NBER) - 2007

We introduce worker differences in labor supply, reflecting differences in skills and assets, into a model of separations, matching, and unemployment over the business cycle. Separating from employment when unemployment duration is long is particularly costly for workers with high labor supply....

Persistent link: https://www.econbiz.de/10005829195

Reset Price Inflation and the Impact of Monetary Policy Shocks

Bils, Mark Joseph; Klenow, Peter J.; Malin, Benjamin A. - National Bureau of Economic Research (NBER) - 2009

for the persistence and volatility of "reset price inflation." Reset price inflation is the rate of change of all desired … construct an empirical measure of reset price inflation. We find that time-dependent models imply unrealistically high … persistence and stability of reset price inflation. This discrepancy is exacerbated by adding strategic complementarities, even …

Persistent link: https://www.econbiz.de/10005775074

Some Evidence on the Importance of Sticky Prices

Bils, Mark Joseph; Klenow, Peter J. - National Bureau of Economic Research (NBER) - 2002

categories. We exploit this variation to ask how inflation for 'flexible-price goods' (goods with frequent changes in individual … prices) differs from inflation for 'sticky-price goods' (those displaying infrequent price changes). Compared to the … predictions of popular sticky price models, actual inflation rates are far more volatile and transient, particularly for sticky …

Persistent link: https://www.econbiz.de/10005050249

How Sticky Wages in Existing Jobs Can Affect Hiring

Bils, Mark Joseph; Chang, Yongsung; Kim, Sun-Bin - National Bureau of Economic Research (NBER) - 2014

We consider a matching model of employment with wages that are flexible for new hires, but sticky within matches. We depart from standard treatments of sticky wages by allowing effort to respond to the wage being too high or low. Shimer (2004) and others have illustrated that employment in the...

Persistent link: https://www.econbiz.de/10010821680