Output and Unemployment Dynamics during the Great Recession: A Panel Unobserved Components Analysis
August 1, 2010
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Summary
This paper analyzes the sources of output and unemployment dynamics in the world economy during the Great Recession. This analysis is based on a panel unobserved components model of the world economy, disaggregated into its fifteen largest national economies. We find that excess supply pressure was primarily transmitted from the output market to the labor market by economy specific combinations of negative domestic or foreign output demand shocks, mitigated to varying degrees by countercyclical labor market policies or institutions.
Subject: Labor demand, Labor market institutions, Labor markets, Short term interest rates, Unemployment rate
Keywords: WP
Pages:
20
Volume:
2010
DOI:
Issue:
185
Series:
Working Paper No. 2010/185
Stock No:
WPIEA2010185
ISBN:
9781455202195
ISSN:
1018-5941
