frequencies and numerical simulations illustrate this point. In addition, this estimation methodology shows that the elasticity of … frequency data generate better estimates of output- employment elasticity while high frequency data generate better estimates of … output-average hours elasticity. This result comes from the fact that time aggregation increases (decreases) the bias in the …

There is a long standing controversy over the magnitude of the Frisch labor supply elasticity. Macro economists using … of the OLS bias, which is negative. As a result, Frisch elasticity estimates near zero appear (spuriously) precise, while … positive Frisch elasticity. Fortunately, the Anderson-Rubin (AR) test does not su ff er from this power asymmetry problem. The …