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Full-Text Articles in Macroeconomics
An Estimated Open-Economy Dsge Model With Search-And-Matching Frictions: The Case Of Hungary, Istvan Konya, Zoltán Jakab
An Estimated Open-Economy Dsge Model With Search-And-Matching Frictions: The Case Of Hungary, Istvan Konya, Zoltán Jakab
Istvan Konya
This paper builds and estimates a mediumscale, small open economy DSGE model augmented with search-and-matching frictions in the labor market, and different wage setting behavior in new and existing jobs. The model is estimated using Hungarian data between 2001-2008. We find that: (i) the inclusion of matching frictions significantly improves the model’s empirical fit; (ii) the extent of new hires wage rigidity is quantitatively important for keymacro variables; (iii) labor market shocks do not play an important role in inflation dynamics, but the structure of the labor market influences the monetary transmission mechanism.
How Does Labour Market Structure Affect The Response Of Economies To Shocks?, Istvan Konya, Aurelijus Dabusinskas, Stephen Millard
How Does Labour Market Structure Affect The Response Of Economies To Shocks?, Istvan Konya, Aurelijus Dabusinskas, Stephen Millard
Istvan Konya
The recent crisis in the Eurozone has led to much discussion about the structure of labour markets in different Eurozone economies. In particular, there has been much talk of the need for structural labour market reform in the Eurozone periphery. But, there are many aspects of labour market structure – eg, wage flexibility, flexibility in hiring and firing, benefits, etc – and it is not clear a priori which aspects really matter. In this paper, we analyse how cross-country differences in labour market characteristics – in particular, wage and employment rigidities – shape the response of different countries to a …