Labor adjustment costs and complex eigenvalues - Archive ouverte HAL
Article Dans Une Revue Economic Theory Année : 2005

Labor adjustment costs and complex eigenvalues

Résumé

Aggregate variables display both persistence and damped oscillations in response to temporary external shocks. The standard real business cycles (RBC) model cannot explain these patterns, because its stable eigenvalues are positive and real. We demonstrate that this model with labor adjustment costs can yield complex eigenvalues. However, numerical experiments suggest that the model cannot display distinguishable damped oscillations of aggregate variables.

Dates et versions

hal-04318788 , version 1 (01-12-2023)

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Xavier Fairise, Patrick Fève. Labor adjustment costs and complex eigenvalues. Economic Theory, 2005, 29 (1), pp.95-110. ⟨10.1007/s00199-005-0007-0⟩. ⟨hal-04318788⟩
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