Part 3 - The Labor Market_cropped

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1、FFFECON667-Macroeconomics1Part3-TheLaborMarketPreparedbyNicolasL.JacquetFFFECON667TheLaborMarketIntroductionY=C+I+G+(XN);donewithCandI,andtakeGandXNasexog(addressedinpublicecon/politicalecon,andinternecon).Nowturnourattentiontosupplysideoftheeconomy.YdependsonK,butalsoonN.Inthispartoft

2、hecoursewe…rstconsidertheWalrasianviewofthelabormarket,thatis,aviewthatabstracts,amongotherthings,fromthefactthat(i)notallmatchbetweenaworkeranda…rm/jobareequal,and(ii)itcantaketimeforworkerstolocatesuitablejobs,andthatitcantaketimefor…rmswhichhavevacantjobstolocateworkerssuitableforthesejo

3、bs.NicolasL.Jacquet1ECON667TheLaborMarket–Thisapproachofthelabormarketisstatic.–Thiswillconstituteabenchmark.Wethenmoveontoconsideradynamicapproachtothelabormarket:–focusonthe‡owscharacterizingthelabormarket.NicolasL.Jacquet2ECON667TheLaborMarketSomeDe…nitionsIfwedenotebyUthenumberofunemp

4、loyedworkers,byEthenumberofemployedworkers,andbyNthenumberofpeopleintheworkingagepopulationthatareoutofthelaborforce,thenwecande…nethefollowingterms:–Workingagepopulation=E+U+N–Laborforce=E+U–Laborforceparticipationrate=(E+U)=(E+U+N)–Employmenttopopulationratio=E=(E+U+N)–Unemploymentrate=U=

5、(E+U)NicolasL.Jacquet3ECON667TheLaborMarketMeasurementissues:–Notalwayseasytogetaccuratedata(relyonsurveys,...);–DistinguisingbetweenUandNisnoteasy;–Howtoclassifyunderemployedworkers?NicolasL.Jacquet4VoL.1No.1ELSByETAL.:ThEINSANdouTSofCyCLICALuNEMPLoyMENT910.12RecessiondatesUnemploymentrat

6、e0.10.080.060.040.02019481950195219541956195819601962196419661968197019721974197619781980198219841986198819901992199419961998200020022004Figure1.UnemploymentRateandRecessionaryUnemploymentDatesUsedAnaturalquestionatthispointiswhatfractionoftheincreaseinunemploymentduringarecessionisduetoinc

7、reasesintheinflowrateintounemployment,andwhatfractionisduetodeclinesintheoutflowrate?ThankstothedecompositionpresentedinSectionIA,suchaquestionisstraightforwardtoanswer.Wefirstidentifiedstart10andenddatesfortheunemploymentramp-upineachrecessionfrom1948on