1,721,005 research outputs found
The Welfare and Employment Effects of Centralized Public Sector Wage Bargaining
Full text linkIn many countries, the government pays almost identical nominal wages to workers living in regions with notable
economic disparities. By developing a two-region general equilibrium model with endogenous migration and search
frictions in the labour market, I study the differences in terms of unemployment, real wages, and welfare between a regional wage bargaining process and a national one in the public sector. Adopting the latter makes residents in the poorer region better off and residents of the richer region worse off. Private sector employment decreases in the poorer region and it increases in the richer one. Under some conditions, the unemployment rate in the poorer region soars. Simulation results also show that a regional bargaining scheme may increase inequality
Matching Models Under Scrutiny: An Appraisal of the Shimer Puzzle: Matching Models Under Scrutiny
No full textTwo papers have recently questioned the quantitative consistency of
the search and matching model. Shimer has argued that a textbook matching
model is unable to explain the cyclical variation of unemployment and vacancies
in the US economy. Costain and Reiter have found the existence of a trade-off in
the model's performance: any attempt to change the calibrated values to improve
the model's ability to predict the business cycle jeopardizes its predictions of the
impact of unemployment benefits on unemployment. In surveying the literature
originating in these findings, I distinguish three different avenues that have been
followed to correct the model: change in wage formation, change in the calibration
and changes in the model specification. The last approach seems to achieve the
best results both from a business cycle and from a microeconomic viewpoint
The Cyclical Volatility of Equilibrium Unemployment and Vacancies: Evidence from Italy
Full text linkIn this paper, we explore the fluctuations of unemployment and vacancies in the Italian labour market over the last twenty years. For reasons of data availability on unfilled job openings, this period is split in two parts. The former is covered by a help-wanted time series, while the latter is analyzed relying on a harmonized vacancy rate. In both periods, in line with previous findings on the unemployment volatility puzzle, we find that the tightness indicator is more volatile than productivity. However, the gap between the respective volatilities achieves the order of magnitude observed in other countries only by using the official measure of vacancies. In addition, we show that a model with segmented labour markets and on-the-job search has the potential to provide a rationale for the pattern disclosed by the most recent data
The Time Diversification Controversy: An Analysis of the Italian Financial Market
No full textDoes the risk of an investment change with its timehorizon? In this article we put to test the competing claims presented by the literature on the so-called time diversification controversy. Using data from the Italian financial market of the last twenty years, we look at the evolution of different measures of risk as we extend the investment period. Our results seem to confirm Samuelson’s view, that, under certain conditions, the riskiness of an investment increases with the time horizon
The end of the Equity Premium Puzzle? An analysis of the European Financial Markets
No full textThis paper evaluates the magnitude of the equity premium in the European financial
markets of the last twenty years. We document a substantial decrease in its value,
especially after the onset of Great Recession. A habit consumption model predicts
a value for the equity premium much higher than observed in data. Conversely, a
simple general equilibrium model in the spirit of Mehra and Prescott (1985) is now able to explain the premium without resorting to extremely high coefficients for risk aversion
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