Does the interaction between shocks and institutions solve the OECD unemployment puzzle ? A theoretical and empirical appraisal
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1 décembre 2007
- handle: 10670/1.pm28xi
- hal: hal-03602950
- SCIENCESPO: 2441/6120
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info:eu-repo/semantics/altIdentifier/hdl/2441/6120
info:eu-repo/semantics/OpenAccess
Mots-clés
C - Mathematical and Quantitative Methods/C.C1 - Econometric and Statistical Methods and Methodology: General/C.C1.C13 - Estimation: General C - Mathematical and Quantitative Methods/C.C3 - Multiple or Simultaneous Equation Models • Multiple Variables/C.C3.C31 - Cross-Sectional Models • Spatial Models • Treatment Effect Models • Quantile Regressions • Social Interaction Models E - Macroeconomics and Monetary Economics/E.E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy/E.E2.E24 - Employment • Unemployment • Wages • Intergenerational Income Distribution • Aggregate Human Capital • Aggregate Labor ProductivitySujets proches
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Aurélien Gaimon et al., « Does the interaction between shocks and institutions solve the OECD unemployment puzzle ? A theoretical and empirical appraisal », Archive ouverte de Sciences Po (SPIRE), ID : 10670/1.pm28xi
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Résumé
This paper adds to the already vast economic literature on the respective role of shocksand institutions in unemployment dynamics. Conclusions of existing studies widely diverge.Such divergences are mainly due to a weak theoretical framework underlying themodels which have been estimated. We have tried to overcome such weaknesses by relyingon a structural model based on a Phillips curve in order to obtain a reduced formunemployment equation. Once estimated, this reduced form accounts for the importanceof macroeconomic shocks in explaining changes in unemployment. The introduction ofinstitutional variables and the estimation of three potential effects on unemployment (level,persistence and sensitivity to shocks) lead to results, which are consistent with theoreticalpredictions. Nevertheless, the role of institutions in explaining changes in unemploymentis limited. We use a panel data approach by pooling country data in order to disentanglefixed country effects.