Unemployment volatility in a generalised staggered Nash wage bargaining framework

Kara, Engin ORCID: https://orcid.org/0000-0003-0715-4857 2024. Unemployment volatility in a generalised staggered Nash wage bargaining framework. Canadian Journal of Economics 57 (2) , pp. 378-400. 10.1111/caje.12709 Item availability restricted.

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Abstract

Micro evidence on wages suggests that there is heterogeneity across wage contract durations. While, on average, wages are sticky, a non-negligible proportion of wages are flexible. I generalize the Gertler and Trigari model to match this heterogeneity and show that the new model closely matches observed unemployment volatility. This finding deviates from the literature proposing an alternative calibration of the standard model and arguing that large unemployment fluctuations require a small surplus from an employment relationship. However, in the multi-sector model I present, unemployment volatility arises even with the standard calibration, where the surplus is relatively large.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Wiley
ISSN:	0008-4085
Related URLs:	https://doi.org/10.5683/SP3/XOMXVC
Date of First Compliant Deposit:	18 March 2024
Date of Acceptance:	19 July 2023
Last Modified:	10 Nov 2024 08:15
URI:	https://orca.cardiff.ac.uk/id/eprint/167313

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