scholarly journals The role of spillovers in Okun’s law: Empirical evidence from Spain

2020 ◽  
pp. 6-6
Author(s):  
José Villaverde ◽  
Adolfo Maza
Keyword(s):  
Business Cycle ◽  
Labour Market ◽  
Indirect Effects ◽  
Temporary Workers ◽  
Key Factors ◽  
Spatial Panel ◽  
The Great Recession ◽  
Output Performance ◽  
The Business Cycle

The Great Recession of the late 2000s has brought to the fore, once again, the relevance of the relationship between output performance and labour market developments all over the world. This paper analyses the validity of Okun?s law in Spain by using regional data from 2000 to 2014, which roughly encompasses a complete business cycle. By estimating a Spatial Panel Durbin Model, the results not only show that a robust, inverse relationship between unemployment and output holds for Spain but also the existence of regional spillovers (indirect effects). In addition, they reveal that there are no time asymmetries between the expansion and recession phases of the business cycle and that human capital, the share of the construction sector, and the share of temporary workers are key factors in explaining unemployment changes. From a policy perspective, our findings support the idea of implementing region-specific policies, since indirect effects are less relevant than direct ones. In any case, national policies would also be effective. These policies, whatever their scope, should be mainly supply-side oriented in expansions (largely labour market policies) and demand-side focused in contractions.

scholarly journals From unemployment to self-employment: The role of entrepreneurship training

2020 ◽  
Vol 10 (1) ◽  
Author(s):  
Marios Michaelides ◽  
Scott Davis
Keyword(s):  
Business Cycle ◽  
Entrepreneurship Training ◽  
The Great Recession ◽  
Self Employment ◽  
Weak Evidence ◽  
Regular Employment ◽  
Effective Policy ◽  
Employment Experience ◽  
The Business Cycle

AbstractWe present experimental evidence on the effects of entrepreneurship training for unemployed workers in the U.S. at two different stages in the business cycle. In the context of a strong economy, training helped training participants – particularly those with prior self-employment experience – to start a business and become self-employed, while it may have persuaded others to pursue salary employment instead. During the Great Recession, training helped training participants become self-employed, particularly those with no prior self-employment experience. Regardless of economic conditions, positive impacts on self-employment were partly or largely offset by reductions in regular employment. These findings indicate that entrepreneurship training may help unemployed workers to become self-employed at different stages of the business cycle, but there is weak evidence that it can be an effective policy for combating unemployment, particularly during recessions.

Reforming the Labour Market in Good and Bad Times

2018 ◽  
Author(s):  
Britta Gehrke ◽  
Enzo Weber
Keyword(s):  
Time Series ◽  
Business Cycle ◽  
Labour Market ◽  
Markov Switching ◽  
Matching Theory ◽  
Market Reforms ◽  
Structural Reforms ◽  
Labour Market Reforms ◽  
Short Run ◽  
The Business Cycle

This chapter discusses how the effects of structural labour market reforms depend on whether the economy is in expansion or recession. Based on an empirical time series model with Markov switching that draws on search and matching theory, we propose a novel identification of reform outcomes and distinguish the effects of structural reforms that increase the flexibility of the labour market in distinct phases of the business cycle. We find in applications to Germany and Spain that reforms which are implemented in recessions have weaker expansionary effects in the short run. For policymakers, these results emphasize the costs of introducing labour market reforms in recessions.

scholarly journals Autonomes Fahren statt Stop and Go: Vorschläge zur effektiven Gestaltung der deutschen Kurzarbeit

2019 ◽  
Vol 68 (3) ◽  
pp. 252-260
Author(s):  
Almut Balleer ◽  
Britta Gehrke ◽  
Brigitte Hochmuth ◽  
Christian Merkl
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Great Recession ◽  
Timely Manner ◽  
Rule Based ◽  
The Great Recession ◽  
Stop And Go ◽  
Time Work ◽  
The Business Cycle ◽  
Short Time

Abstract This article argues that short-time work stabilized employment in Germany substantially during the Great Recession in 2008/09. The labor market instrument acted in timely manner, as it was used in a rule-based fashion. In addition, discretionary extensions were effective due to their interaction with the business cycle. To ensure that short-time work will be effective in the future, this article proposes an automatic facilitation of the access to short-time work in severe recessions. This reduces the likelihood of a too extensive use at the wrong point in time as well as structural instead of cyclical interventions.

scholarly journals Inequality over the business cycle: the role of distributive shocks

2021 ◽  
pp. 1-30
Author(s):  
Marius Clemens ◽  
Ulrich Eydam ◽  
Maik Heinemann
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Business Cycle ◽  
Parameter Estimates ◽  
Panel Estimation ◽  
Bayesian Techniques ◽  
Elasticity Of Intertemporal Substitution ◽  
Ex Ante ◽  
The Business Cycle

Abstract This paper examines how wealth and income inequality dynamics are related to fluctuations in the functional income distribution over the business cycle. In a panel estimation for OECD countries between 1970 and 2016, although inequality is, on average countercyclical and significantly associated with the capital share, one-third of the countries display a pro- or noncyclical relationship. To analyze the observed pattern, we incorporate distributive shocks into an RBC model, where agents are ex ante heterogeneous with respect to wealth and ability. We find that whether wealth and income inequality behave countercyclically or not depends on the elasticity of intertemporal substitution and the persistence of shocks. We match the model to quarterly US data using Bayesian techniques. The parameter estimates point toward a non-monotonic relationship between productivity and inequality fluctuations. On impact, inequality increases in response to TFP shocks but subsequently declines. Furthermore, TFP shocks explain 17% of inequality fluctuations.

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