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This paper shows that labor market search frictions do not explain fluctuations in the labor wedge per se. However, the introduction of extensive and intensive margin clarifies that measuring the MRS in terms of total hours artificially introduces procyclicality in the MRS. When the MRS is...
Persistent link: https://www.econbiz.de/10013123923
This paper shows that labor market search frictions do not explain fluctuations in the labor wedge per se. However, the introduction of extensive and intensive margin clarifies that measuring the MRS in terms of total hours artificially introduces procyclicality in the MRS. When the MRS is...
Persistent link: https://www.econbiz.de/10014399358
This paper assesses whether labor market frictions, in the form of searching and matching, can help explain movements in the labor wedge - the gap between the marginal rate of substitution (MRS) and the marginal productivity of labor in a perfectly competitive business cycle model. Results...
Persistent link: https://www.econbiz.de/10013125946
This paper assesses whether labor market frictions, in the form of searching and matching, can help explain movements in the labor wedge - the gap between the marginal rate of substitution (MRS) and the marginal productivity of labor in a perfectly competitive business cycle model. Results...
Persistent link: https://www.econbiz.de/10009007771
This paper assesses whether labor market frictions, in the form of searching and matching, can help explain movements in the labor wedge—the gap between the marginal rate of substitution (MRS) and the marginal productivity of labor in a perfectly competitive business cycle model. Results...
Persistent link: https://www.econbiz.de/10009008709
We study the macroeconomic implications of the debt overhang distortion. In our model, the distortion arises because investment is noncontractible—when a firm borrows funds, the debt contract cannot specify or depend on the firm’s future level of investment. After the debt contract is...
Persistent link: https://www.econbiz.de/10008826870
Persistent link: https://www.econbiz.de/10009425654
Persistent link: https://www.econbiz.de/10011342291
We study the macroeconomic implications of the debt overhang distortion. In our model, the distortion arises because investment is noncontractible - when a firm borrows funds, the debt contract cannot specify or depend on the firm's future level of investment. After the debt contract is signed,...
Persistent link: https://www.econbiz.de/10013144422