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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Firm entry, endogenous wage moderation, and labor market dynamics
AU - Colciago, Andrea
AU - Fasani, Stefano
AU - Rossi, Lorenza
PY - 2025/2/28
Y1 - 2025/2/28
N2 - Profit-seeking is a key driver of new business creation, which, in turn, significantly influences unemployment dynamics. This paper uses US data to estimate the joint responses of firm entry, profits, unemployment, hours worked, and other aggregates to commonly studied supply shocks. Our analysis finds a positive correlation between firm entry, profits, and total hours worked, alongside a negative correlation with the unemployment rate. We develop and estimate a general equilibrium model that captures these dynamics.
AB - Profit-seeking is a key driver of new business creation, which, in turn, significantly influences unemployment dynamics. This paper uses US data to estimate the joint responses of firm entry, profits, unemployment, hours worked, and other aggregates to commonly studied supply shocks. Our analysis finds a positive correlation between firm entry, profits, and total hours worked, alongside a negative correlation with the unemployment rate. We develop and estimate a general equilibrium model that captures these dynamics.
KW - Bayesian analysis
KW - Entry
KW - Search and matching
KW - Unemployment
U2 - 10.1016/j.euroecorev.2024.104939
DO - 10.1016/j.euroecorev.2024.104939
M3 - Journal article
AN - SCOPUS:85214343314
VL - 172
JO - European Economic Review
JF - European Economic Review
SN - 0014-2921
M1 - 104939
ER -