Wijnbergen, Sweder van; Willems, Tim - In: Oxford Economic Papers 65 (2013) 2, pp. 219-239
This paper first documents the increase in the lag with which US labour input reacts to macroeconomic fluctuations since the 1980s. We show that lagged labour adjustment is optimal when there is uncertainty about the persistence of shocks and labour input is costly to adjust. We then present...