What (Really) Accounts for the Fall in Hours After a Technology Shock?.
Nooman. Rebei
Bok Engelsk 2012 · Electronic books.
| Omfang | 1 online resource (42 pages)
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| Utgave | 1st ed.
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| Opplysninger | Cover -- Contents -- I. Introduction -- II. Stylized facts and the RBC model -- A. Stylized facts -- B. The benchmark RBC model -- 1. Representative household's and firm's problems -- 2. Impulse-response functions -- III. Alternative models -- A. The sticky price (SP) model -- B. The entry-exit (EE) model -- C. The habit in consumption (HC) model -- D. The persistent technology shock (PT) model -- E. The labor friction (LF) model -- F. The Leontief production (LP) model -- IV. Full information estimation and model comparison -- A. Priors and data -- B. Estimation results and model comparison -- C. Impulse-response functions -- D. Autocorrelation functions -- V. Robustness -- VI. Conclusion -- References -- Tables -- 1. Prior distributions of parameters -- 2. Parameter Estimation Results -- 3. Autocorrelation statistics -- 4. Estimation results with sticky wages -- Figures -- 1. SVAR IRFs following a technology shock -- 2. Impulse-response functions: SVAR versus the standard RBC model -- 3. Impulse-response functions: SVAR versus the SP model -- 4. Impulse-response functions: SVAR versus the EE model -- 5. Impulse-response functions: SVAR versus the HC model -- 6. Impulse-response functions: SVAR versus the PT model -- 7. Impulse-response functions: SVAR versus the LF model -- 8. Impulse-response functions: SVAR versus the LP model -- 9. IRFs of the Alternative Estimated Models -- 10. Autocorrelations of the Alternative Models -- 11. Autocorrelations: SP versus HC model.. - The paper asks how state of the art DSGE models that account for the conditional response of hours following a positive neutral technology shock compare in a marginal likelihood race. To that end we construct and estimate several competing small-scale DSGE models that extend the standard real business cycle model. In particular, we identify from the literature six different hypotheses that generate the empirically observed decline in worked hours after a positive technology shock. These models alternatively exhibit (i) sticky prices; (ii) firm entry and exit with time to build; (iii) habit in consumption and costly adjustment of investment; (iv) persistence in the permanent technology shocks; (v) labor market friction with procyclical hiring costs; and (vi) Leontief production function with labor-saving technology shocks. In terms of model posterior probabilities, impulse responses, and autocorrelations, the model favored is the one that exhibits habit formation in consumption and investment adjustment costs. A robustness test shows that the sticky price model becomes as competitive as the habit formation and costly adjustment of investment model when sticky wages are included.
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| ISBN | 9781475552362
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