Replication data for: Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Comment
- Takahashi, Shuhei
AbstractChang and Kim (2007) develop an incomplete asset markets model incorporating discrete labor supply and idiosyncratic labor productivity. Their results resolve long-standing puzzles for business cycle models. Specifically, they produce a low correlation between aggregate hours worked and labor productivity (0.23) and a labor wedge with 76 percent the volatility of output. I show that these results arise from errors in their computational method. I resolve their model using a corrected method and find a strong, positive correlation between hours and productivity (0.80). Fluctuations in the labor wedge decrease to 24 percent of those in output.
Is version of
Takahashi, Shuhei. “Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Comment.” American Economic Review 104, no. 4 (April 2014): 1446–60. https://doi.org/10.1257/aer.104.4.1446.
- ID: 10.1257/aer.104.4.1446 (DOI)
Update Metadata: 2020-11-18 | Issue Number: 1 | Registration Date: 2020-11-18