Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241276 
Year of Publication: 
2021
Citation: 
[Journal:] International Economic Review [ISSN:] 1468-2354 [Volume:] 62 [Issue:] 3 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2021 [Pages:] 1281-1317
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
We analyze the joint dynamics of prices, productivity, and employment across firms, building a dynamic equilibrium model of heterogeneous firms who compete for workers and customers in frictional labor and product markets. Using panel data on prices and output for German manufacturing firms, the model is calibrated to evaluate the quantitative contributions of productivity and demand for the labor market. Product market frictions decisively dampen the firms' employment adjustments to productivity shocks. We further analyze the impact of aggregate shocks to the first and second moments of productivity and demand and relate them to business-cycle features in our data.
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Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version

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