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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

Building an Identified Equilibrium Model of Aggregate Labor Market

Vol.17, No.4, December , 25–44



  •   (Department of Economics, Chonbuk National University)

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Abstract  

This paper builds an econometrically identified equilibrium model of the labor market, by which one can jointly review labor supply and demand structure. A simple model economy is presented, where preferences are time-nonseparable, but technology is time-separable. The model allows recovery of the preference and technology parameters relevant to labor supply and demand behavior. The empirical model is verified to satisfy an econometric identification condition and estimated using a nonlinear instrumental method. The identified labor supply and demand parameters are consistent with theory. In conclusion, it appears that aggregate labor market fluctuations do not easily reject equilibrium interpretation.


Keywords
   Identification of Aggregate labor demand and supply, Time-nonseparable preference, Intertemporal substitution in labor supply, Adjustment costs in labor demand, Interest rate and labor market, Econometric Identification and instrumental estimation of nonl

JEL classification codes
   E24, J40
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