TY - JOUR
T1 - The aggregate effects of sectoral reallocations
AU - Phelan, Christopher
AU - Trejos, Alberto
PY - 2000/4
Y1 - 2000/4
N2 - Can a one-time, permanent change in the fundamentals behind the sectoral composition of the economy prompt an aggregate downturn? Can this downturn be non-negligible, even if one uses US data to determine the relative size of gross vs. net job flows, and the importance of job creation costs? Can one consider the military build-down of the 1990s as a plausible cause for the 1990-1991 recession? Do sectoral reallocations generate responses that are qualitatively similar to 'productivity shocks?' We use a variant of the Mortensen-Pissarides (1994. Review of Economic Studies 61, 397-415) job creation/destruction model, calibrate it to US labor market data, and run experiments that suggest one can answer yes to all these questions.
AB - Can a one-time, permanent change in the fundamentals behind the sectoral composition of the economy prompt an aggregate downturn? Can this downturn be non-negligible, even if one uses US data to determine the relative size of gross vs. net job flows, and the importance of job creation costs? Can one consider the military build-down of the 1990s as a plausible cause for the 1990-1991 recession? Do sectoral reallocations generate responses that are qualitatively similar to 'productivity shocks?' We use a variant of the Mortensen-Pissarides (1994. Review of Economic Studies 61, 397-415) job creation/destruction model, calibrate it to US labor market data, and run experiments that suggest one can answer yes to all these questions.
KW - Business cycles
KW - E32
KW - Matching
KW - Sectoral shocks
UR - http://www.scopus.com/inward/record.url?scp=0009692958&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0009692958&partnerID=8YFLogxK
U2 - 10.1016/S0304-3932(99)00056-2
DO - 10.1016/S0304-3932(99)00056-2
M3 - Article
AN - SCOPUS:0009692958
VL - 45
SP - 249
EP - 268
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
SN - 0304-3932
IS - 2
ER -