Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273052 
Year of Publication: 
2022
Series/Report no.: 
EERI Research Paper Series No. 08/2022
Publisher: 
Economics and Econometrics Research Institute (EERI), Brussels
Abstract: 
Stochastic shocks to aggregate labor supply elasticity are introduced into a real-business-cycle setup augmented with a detailed government sector. The model is calibrated to Bulgarian data for the period following the introduction of the currency board arrange-ment (1999-2018). The quantitative importance of a stochastic aggregate labor supply elasticity parameter is investigated for the magnitude of the cyclical fluctuations in Bulgaria. The quantitative effect of such a stochasticity increases the variability of hours, and lowers the correlation between hours and wages, and thus is found to be quantitatively important for the labor market aspect of business cycles.
Subjects: 
Business cycles
stochastic aggregate labor supply elasticity
Bulgaria
JEL: 
E24
E32
Document Type: 
Working Paper

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