1,721,030 research outputs found
Non-linear dynamic of real wages over the business cycles
No full textThis paper aims at analysing the dynamic properties of real wages over the business cycle. We apply a Bayesian vector autoregressive (BVAR) model and analyse the possible asymmetric behaviour of real wages in response to different macroeconomic shocks. Finally, we use the NBER business cycle periodisation to evaluate how real wages interact with the different shocks during contractions and booms. The results indicate that real wages cyclicality substantially depends on the driving forces of business cycle fluctuations. Different time periods are dominated by different types of shocks. When the business cycle is mainly driven by supply-side shocks real wages present a pro-cyclical behaviour. On the contrary, when the business cycle is driven by aggregate demand shocks real wages move counter-cyclically
Designing the optimal lenght of working time: a counterfactual policy analysis
No full textPurpose – How many hours per week should workers in the USA and Germany spend at their
paying jobs? The present paper aims to address this question by constructing policymakers’ reaction
functions capable of modelling the optimal length of working time as a function of the relevant labour
market variables.
Design/methodology/approach – The study is based on a counterfactual policy experiment. Given
a policymaker’s loss function and a structural model of the labour market alternative specifications of
reaction functions are defined where the response coefficients indicate how policymakers should react
to any news in the labour market in order to stabilise employment and wages.
Findings – The results suggest that simple rules perform quite well and that the advantages
obtained from adopting an optimal control-based rule are not so great. Moreover, the analysis
emphasises the success of the wage-based rule and of the employment-based rule in the USA and
Germany, respectively.
Research limitations/implications – The study is based on a counterfactual policy experiment,
which perhaps limits its operational value.
Practical implications – Labour market authorities might stabilise employment and wages by
implementing policy rules.
Originality/value – The paper proposes a policy rule to capture the dynamics of the weekly
working hours. According to the rule in the paper the length of the workweek is an inverse function of
the deviation between the actual and potential employment level
Evaluating the effects of working hours on employment and wages
No full textThe paper investigates whether a decrease in standard working time (the stipulated weekly working
time) might produce work-sharing, i.e. a redistribution of a given amount of work over a larger
number of employees. To this end, we adopt a structural vector error correction model thought to
be representative of the main effects that working hours have on output, employment and wages in
Germany and the US. Impulse response analysis suggests that permanent negative shocks to working
hours lead to: (i) a decrease in the real GDP, (ii) a significant fall in real wages, and (iii) a persistent
decrease in employment. More interestingly, results obtained from error-variance decomposition show
that employment movements are not driven by working hours and that weekly hour shocks account
for a minimal portion of employment and output dynamics. The main policy result emerging from the
empirical analysis suggests that the implementation of work-sharing programs has not clear beneficial
effects on the labour market performances
Information and Learning in Bertrand and Cournot Experimental Duopolies
No full textIn this paper we report the results from a series of experiments on Cournot (homogeneous and differentiated products) and Bertrand (differentiated products) duopoly markets with no uncertainty, fixed endpoints and random matching. For each set, the experiments are designed with three alternative information set up: I) no information (participants are only informed on their own payoff for the period), 2) average industrial profit (participants are informed on their own performance, as well as on the average profit in all markets), 3) imitation (players are informed, on request, on their rivals’ past successful actions). The effect of different information structures on individual behaviour in market experiments is a long debated issue. Recently, using evolutionary arguments, it has been argued that the imitation of successful strategies induces more competitive equilibria in market games (M. Schaffer, 1989; F. Vega-Redondo 1997). By the same token, the information on the industry’s average profitability might induce more collusive outcomes, if such markets signals are perceived by players as aspiration levels and if they therefore try new strategies anytime their profits fall below such threshold (F. Palomino and F. Vega-Redondo, 1999; H. Dixon, 2000). Our aim is to test such predictions in duopoly price and quantity games. We find that the imitation learning rule prevails when players have full information on their rivals’ previous choices, and such learning behaviour induces more competitive outcomes in the Cournot market designs. As for the aspiration learning rule, the evidence is unclear. Whilst in the majority of the cases, players experiment new strategies when their payoff falls below the average profit, as predicted by the aspiration rule, we find no evidence of convergence to collusion, though in the Cournot experiments, the fraction of players choosing cooperative actions in the last stages of the game significantly increase in the second information setting
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