Hours and employment variation in business cycle theory

Previous business cycle models have made the assumption that all the variation in the labor input is either due to changes in hours per worker or changes in number of workers, but not both. In this paper, both vary. We think this a better model for estimating the contribution of Solow technology shocks to aggregate fluctuations. We find that about 70 percent of U.S. postwar cyclical fluctuations are induced by variations in the Solow technology parameter.

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Year of publication:	1989
Authors:	Kydland, Finn E. ; Prescott, Edward C.
Institutions:	Federal Reserve Bank of Minneapolis
Subject:	Business cycles \| Employment (Economic theory)

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Extent:	application/pdf
Series:	Discussion Paper / Institute for Empirical Macroeconomics.
Type of publication:	Book / Working Paper
Notes:	Number 17
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005498980