
Economic fluctuations in a model with an overlapping structure of employment
Author(s) -
Toyoki Matsue
Publication year - 2021
Publication title -
economics and business review/the poznań university of economics review
Language(s) - English
Resource type - Journals
eISSN - 2392-1641
pISSN - 1643-5877
DOI - 10.18559/ebr.2021.3.2
Subject(s) - shock (circulatory) , economics , productivity , period (music) , economic model , labour economics , general equilibrium theory , overlapping generations model , demographic economics , macroeconomics , physics , medicine , acoustics
This study presents a dynamic general equilibrium model with an explicit employment period and investigates economic fluctuations to a temporary productivity shock. Numerical experiments indicate oscillatory responses of new hiring and employment to the shock which are not observed in a standard flexible price model. The explicit employment period constructs an overlapping structure of employment which results in the oscillatory response. This study also examines the effects of change in employment period to economic fluctuations and shows that the variations in new hiring are higher when the employment period is long.