Archive
Media Response Archive ...
See page
Financial Stability
Financial Systems: The Anatomy of the Market Economy How the financial system is...
See page
East Germany
The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the...
See page
CompNet Database
The CompNet Competitiveness Database The Competitiveness Research Network (CompNet)...
See page
IWH-CompNet Discussion Papers
IWH-CompNet Discussion Papers The IWH-CompNet Discussion Paper series presents research...
See page
Working Papers
Macroeconomic Effects from Sovereign Risk vs. Knightian Uncertainty ...
See page
Research Clusters
Three Research Clusters ...
See page
17.08.2022 • 19/2022
Labour mobility is part of structural change
The coal phase-out will also change the affected regions in that part of the workforce will migrate. Politicians should take this process into account in structural policy, because it cannot be completely prevented. A study published by the Halle Institute for Economic Research (IWH) illustrates this with a historical example.
Oliver Holtemöller
Read press release
The Impact of Active Aggregate Demand on Utilisation-adjusted TFP
Konstantin Gantert
IWH Discussion Papers,
No. 9,
2022
Abstract
Non-clearing goods markets are an important driver of capacity utilisation and total factor productivity (TFP). The trade-off between goods prices and household search effort is central to goods market matching and therefore drives TFP over the business cycle. In this paper, I develop a New-Keynesian DSGE model with capital utilisation, worker effort, and expand it with goods market search-and-matching (SaM) to model non-clearing goods markets. I conduct a horse-race between the different capacity utilisation channels using Bayesian estimation and capacity utilisation survey data. Models that include goods market SaM improve the data fit, while the capital utilisation and worker effort channels are rendered less important compared to the literature. It follows that TFP fluctuations increase for demand and goods market mismatch shocks, while they decrease for technology shocks. This pattern increases as goods market frictions increase and as prices become stickier. The paper shows the importance of non-clearing goods markets in explaining the difference between technology and TFP over the business cycle.
Read article