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A theory of price adjustment under loss aversion

Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - 2014

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …

Persistent link: https://www.econbiz.de/10010350414

Characteristics of unemployment dynamics : the chain reaction approach

Karanassou, Marika; Snower, Dennis J. - 2000

labor resources generated in the aftermath of a shock). Furthermore, we estimate the contributions of individual lagged …

Persistent link: https://www.econbiz.de/10011325992

On price-setting for identical products in markets without formal trade barriers

Hassink, Wolter H. J.; Schettkat, Ronald - 2001

This paper investigates price-setting for truly homogenous products sold in markets without any formal trade barriers. We use data from IKEA, a furniture company selling identical products in an identical shopping environment in different EU countries. We get four remarkable outcomes: 1) The law...

Persistent link: https://www.econbiz.de/10011402390

Adjustment dynamics and the natural rate : an account of UK unemployment

Henry, S. G. B.; Karanassou, Marika; Snower, Dennis J. - 1999

This paper challenges what is the standard account of UK unemployment, namely that the major swings in unemployment over the past 25 years are due predominantly to movements in the underlying empirical “natural rate of unemployment” (NRU). Our analysis suggests that the British NRU has...

Persistent link: https://www.econbiz.de/10011313937

Spatial and temporal diffusion of house prices in the UK

Holly, Sean; Pesaran, M. Hashem; Yamagata, Takashi - 2010

This paper provides a method for the analysis of the spatial and temporal diffusion of shocks in a dynamic system. We use changes in real house prices within the UK economy at the level of regions to illustrate its use. Adjustment to shocks involves both a region specific and a spatial effect....

Persistent link: https://www.econbiz.de/10003934196

Escaping social pressure: fixed-term contracts in multi-establishment firms

Bassanini, Andrea; Caroli, Eve; Fontaine, François; … - 2021

We develop a simple theoretical model showing that, by adding to the adjustment costs associated with permanent contracts, local social pressure against dismissals creates an incentive for CEOs to rely on fixed-term contracts, in an attempt to escape social pressure. Using linked...

Persistent link: https://www.econbiz.de/10012415958

Asymmetric labor market institutions in the EMU and the volatility of inflation and unemployment differentials

Abbritti, Mirko; Müller, Andreas - 2012

How does the asymmetry of labor market institutions affect the adjustment of a currency union to shocks? To answer this question, this paper sets up a dynamic currency union model with monopolistic competition and sticky prices, hiring frictions and real wage rigidities. In our analysis, we...

Persistent link: https://www.econbiz.de/10009536516

The China shock : learning from labor market adjustment to large changes in trade

Autor, David H.; Dorn, David; Hanson, Gordon H. - 2016

unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience …

Persistent link: https://www.econbiz.de/10011452672

Fiscal competition for imperfectly-mobile labor and capital : a comparative dynamic analysis

Wildasin, David E. - 2009

Interjurisdictional flows of imperfectly-mobile migrants, investment, and other productive resources result in the costly dynamic adjustment of resource stocks. This paper investigates the comparative dynamics of adjustment to changes in local fiscal policy with two imperfectly mobile productive...

Persistent link: https://www.econbiz.de/10003901986

Why do firms use fixed-term contracts?

Portugal, Pedro; Varejão, José M. - 2009

Temporary forms of employment account for a variable but never trivial share of total employment in both the U.S. and in Europe. In this article we look at how one specific form of temporary employment - employment with fixed-term contracts - fits into employers' hiring policies. We find that...

Persistent link: https://www.econbiz.de/10003894789