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Title:A tale of two countries: A comparison of the aggregate effects of sectoral reallocation in the United States and Germany PDF Logo
Authors:Reicher, Christopher Phillip
Issue Date:2011
Series/Report no.:Kiel Working Papers 1721
Abstract:This paper compares the aggregate effects of sectoral reallocation in the United States and Western Germany using a stochastic volatility model of sectoral employment growth. Reallocative shocks have no effect on the natural rate of unemployment in either country, and there is mild evidence that reallocative shocks are contractionary over the cycle. The overall statistical contribution of such shocks to the cycle, however, is limited. Reallocative shocks do not appear to be to blame for the rise in trend unemployment in Germany in the 1980s or for a possible rise in trend unemployment in the United States following the Great Recession.
Subjects:Sectoral shifts
reallocation
natural rate
unemployment
turbulence
stochastic volatility
JEL:E24
E32
J24
J62
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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