Sclerosis and large volatilities: two sides of the same coin

Abstract

"Although the German labor market is very sclerotic (i.e., the average labor market flows are much smaller than in the United States), it is very volatile. Specifically, the standard deviations of the cyclical components of unemployment and the job-finding rate are 18 and 12 times larger than the standard deviation of productivity (i.e., about twice as large as in the United States). We show in the context of a labor-selection model that sclerosis can be expected to generate large labor market volatilities, i.e., they are two sides of the same coin." (Author's abstract, IAB-Doku) ((en))

Cite article

Gartner, H., Merkl, C. & Rothe, T. (2011): Sclerosis and large volatilities: two sides of the same coin. Nürnberg, 13 p.