Aggregate Employment Fluctuations with Microeconomic Asymmetries

Commentary on "Measuring and Analyzing Aggregate Fluctuations: The Importance of Building form Microeconomic Evidence"

To prevent their theories from becoming as unhinged as the Phillips curve, modern macroeconomic theorists conventionally build from microeconomic fundamentals. Recent empirical studies of macroeconomic phenomena that heavily use data from individual producers, exemplified by the work of Davis, Haltiwanger, and Schuh (1996), have convinced empirical macroeconomic practitioners they should do the...

Aggregate and Regional Disaggregate Fluctuations Aggregate and Regional Disaggregate Fluctuations

This paper models uctuations in regional disaggregates as a nonstationary, dynamically evolving distribution. Doing so enables study of the dynamics of aggregate uctuations jointly with those of the rich cross-section of regional disaggregates. For the US, the leading state| regardless of which it happens to be|contains strong predictive power for aggregate uctuations. This e ect is di cult to ...

Employment Fluctuations with Equilibrium Wage Stickiness

Following a recession, the aggregate labor market is slack–employment remains below normal and recruiting efforts of employers, as measured by help-wanted advertising and vacancies, are low. A model of matching friction explains the qualitative responses of the labor market to adverse shocks, but requires implausibly large shocks to account for the magnitude of observed fluctuations. The incorp...

Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations? Comment

The neoclassical e®ects of permanent technology shocks on employment is re-investigated. Contrary to Jordi Gali's (1999) assertion published in this Review, I show that standard neoclassical theory is fully capable of explaining the stylized fact that positive permanent technology shocks reduce employment and that positive transitory nontechnology shocks increase labor productivity.

Aggregate Growth: What Have We Learned from Microeconomic Evidence? By