What caused the recession of 2008? : hints from labor productivity / Casey Mulligan.
Material type:
TextSeries: Working paper series (National Bureau of Economic Research) ; no. 14729.Publication details: Cambridge, MA : National Bureau of Economic Research, 2009Description: 13 p. : ill. ; 22 cmSubject(s): Recessions -- United States -- History -- 21st century | Labor market -- United States -- History -- 21st centuryLOC classification: HB1 | .N38 no.14729Online resources: Click here to access online Summary: A labor market tautology says that any change in labor usage can be decomposed into a movement along a marginal productivity schedule and a shift of the schedule. I calculate this decomposition for the recession of 2008, assuming an aggregate Cobb-Douglas marginal productivity schedule, and find that all of the decline in employment and hours since December 2007 is a movement along the schedule. This finding suggests that a reduction in labor supply and/or an increase in labor market distortions are major factors in the 2008 recession. The decline in aggregate consumption suggests that the reduction in labor supply (if any) is neither a wealth nor an intertemporal substitution effect. "Sticky real wages" or the emergence of significant work disincentives are possible explanations for these findings.
| Item type | Current library | Collection | Call number | Copy number | Status | Date due | Barcode |
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University of Macedonia Library Βιβλιοστάσιο Β (Stack Room B) | Research Papers | HB1.N38 no.14729 (Browse shelf (Opens below)) | 1 | Available | 0013125659 |
Includes bibliographical references (p. 12-13).
A labor market tautology says that any change in labor usage can be decomposed into a movement along a marginal productivity schedule and a shift of the schedule. I calculate this decomposition for the recession of 2008, assuming an aggregate Cobb-Douglas marginal productivity schedule, and find that all of the decline in employment and hours since December 2007 is a movement along the schedule. This finding suggests that a reduction in labor supply and/or an increase in labor market distortions are major factors in the 2008 recession. The decline in aggregate consumption suggests that the reduction in labor supply (if any) is neither a wealth nor an intertemporal substitution effect. "Sticky real wages" or the emergence of significant work disincentives are possible explanations for these findings.
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