Sectoral Shifts and Cyclical Unemployment Reconsidered, Issue 3491

Front Cover
National Bureau of Economic Research, 1990 - Rate of return - 41 pages
0 Reviews
This paper examines the importance of sectoral reallocation and cyclical unemployment; in the postwar US economy. It develops a new measure of reallocation shocks based on the variance of industry stock market excess returns over time, termed cross section volatility. Data on unemployment and vacancies is used to establish that the cross section volatility series is effective in isolating reallocation shocks. The series is then used to measure the contribution of reallocation shocks to aggregate unemployment and to unemployment; of varying durations. On average, about 40 percent of aggregate unemployment is explained by reallocation, but much of the variance of unemployment through time is better explained by cyclical shocks. Reallocation shocks account; for a relatively larger share of long duration unemployment.

From inside the book

What people are saying - Write a review

We haven't found any reviews in the usual places.

Common terms and phrases

Bibliographic information