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Implications of Labor Market Frictions for Risk Aversion and Risk Premia
Swanson, Eric T. - 2019
A flexible labor margin allows households to absorb shocks to asset values with changes in hours worked as well as changes in consumption. This ability to partially offset wealth shocks by varying hours of work can significantly alter the household's attitudes toward risk, as shown in Swanson...
Persistent link: https://www.econbiz.de/10012871945
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Rent Rigidity, Asymmetric Information, and Volatility Bounds in Labor Markets
Bruegemann, Bjoern - 2010
Recent findings have revived interest in the link between real wage rigidity and employment fluctuations, in the context of frictional labor markets. The standard search and matching model fails to generate substantial labor market fluctuations if wages are set by Nash bargaining, while it can...
Persistent link: https://www.econbiz.de/10012760187
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Aggregate Implications of Indivisible Labor, Incomplete Markets, and Labor Market Frictions
Krusell, Per - 2008
This paper analyzes a model that features frictions, an operative labor supply margin, and incomplete markets. We first provide analytic solutions to a benchmark model that includes indivisible labor and incomplete markets in the absence of trading frictions. We show that the steady state levels...
Persistent link: https://www.econbiz.de/10012772373
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Unions in a Frictional Labor Market
Krusell, Per - 2012
A labor market with search and matching frictions, where wage setting is controlled by a monopoly union that follows a norm of wage solidarity, is found vulnerable to substantial distortions associated with holdup. With full commitment to future wages, the union achieves efficient hiring in the...
Persistent link: https://www.econbiz.de/10013103813
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Aggregate Labor Market Outcomes : The Role of Choice and Chance
Krusell, Per - 2010
Commonly used frictional models of the labor market imply that changes in frictions have large effects on steady state employment and unemployment. We use a model that features both frictions and an operative labor supply margin to examine the robustness of this feature to the inclusion of a...
Persistent link: https://www.econbiz.de/10013151366
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Labor-Market Frictions and Employment Fluctuations
Hall, Robert Ernest - 2022
The labor market occupies center stage in modern theories of fluctuations. The most important phenomenon to explain and understand in a recession is the sharp decline in employment and jump in unemployment. This chapter for the Handbook of Macroeconomics considers explanations based on frictions...
Persistent link: https://www.econbiz.de/10013324604
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Labor Market Dynamics When Ideas are Harder to Find
Bilal, Adrien; Engbom, Niklas; Mongey, Simon; Violante, … - 2023
This paper evaluates the impact of slowing economic growth on labor market dynamism and misallocation. It provides a model of endogenous growth via imitation in a frictional labor market. The framework accounts for rich data on worker job-to-job transitions as well as stochastic and lifecycle...
Persistent link: https://www.econbiz.de/10014346493
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Cash-on-Hand and Competing Models of Intertemporal Behavior : New Evidence from the Labor Market
Card, David E. - 2010
This paper presents new tests of the permanent income hypothesis and other widely used models of household behavior using data from the labor market. We estimate the quot;excess sensitivityquot; of job search behavior to cash-on-hand using sharp discontinuities in eligibility for severance pay...
Persistent link: https://www.econbiz.de/10012760593
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Liquidity and Governance
Back, Kerry E. - 2013
Is greater trading liquidity good or bad for corporate governance? We address this question both theoretically and … information concerns her own plans for taking an active role in governance. We show that an increase in the liquidity of the firm …'s stock increases the likelihood of the large investor 'taking the Wall Street walk.' Thus, higher liquidity is harmful for …
Persistent link: https://www.econbiz.de/10013072575
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The Effect of Liquidity on Governance
Edmans, Alex - 2011
This paper studies the effect of stock liquidity on blockholders' choice of governance mechanisms. We focus on hedge … measure governance intent rather than only studying instances of actual governance. We find that liquidity increases the … likelihood that a hedge fund acquires a block in a firm. Conditional upon acquiring a stake, liquidity reduces the likelihood …
Persistent link: https://www.econbiz.de/10013118841