abstract:

In this paper we utilize an open economy DSGE model to analyse factors behind the Great Recession and its transmission into labour markets of selected Southern European countries. We introduce a number of shocks which form potential sources of macroeconomic disturbances, in particular: foreign demand, productivity, bargaining power, labour demand, labour supply, government spending, and job destruction shocks. Using quarterly data for the 1995-2013 period, we estimate the model for Germany, Greece, Italy, Portugal and Spain. We identify shocks determining macroeconomic and labour market fluctuations in each of the countries studied. We also conduct experiments allowing us to assess to what extent differences between countries with regard to macroeconomic and labour market fluctuations resulted from different shocks affecting them, and to what extent from different resilience of particular economies.

keywords: unemployment, rigidities, great Recession, DSGE models

JEL codes: , ,

publication year: 2014

language : English

thematic categories : ,

publishing series : IBS Working Paper

publication number : 01/2014

ISSN : 2451-4373

authors:
Marek Antosiewicz

Institute for Structural Research (IBS)

Piotr Lewandowski

Institute for Structural Research (IBS)

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