Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189320 
Year of Publication: 
2005
Series/Report no.: 
Queen's Economics Department Working Paper No. 1039
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
We develop a Shumpeterian theory of business cycles that relates job creation, job destruction and wages over the cycle to the processes of firm restructuring, innovation and implementation that drive long-run growth. Due to incentive problems, production workers are employed via relational contracts and experience involuntary unemployment. Job destruction and firm turnover are counter-cyclical, but labour productivity growth and job creation are pro-cyclical. Endogenous fluctuations in job creation on the intensive margin are the dominant source of changes in employment growth. Our framework also highlights the counter-cyclical forces on wages due to restructuring, and illustrates the relationship between the cyclicality of wages and long-run productivity growth. 052<p type="texpara" tag="Body Text" et="abstract" >
Subjects: 
Intrinsic business cycles
job creation and destruction
innovation
wage cyclicality
JEL: 
E0
E3
O3
O4
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.