Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/101001 
Year of Publication: 
2013
Series/Report no.: 
Working Paper No. 2013-16
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
Recent empirical evidence establishes that a positive technology shock leads to a decline in labor inputs. Can a flexible price model enriched with labor market frictions replicate this stylized fact? We develop and estimate a standard flexible price model using Bayesian methods that allows, but does not require, labor market frictions to generate a negative response of employment to a technology shock. We find that labor market frictions account for the fall in labor inputs.
Subjects: 
technology shocks
employment
labor market frictions
JEL: 
E32
Document Type: 
Working Paper

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