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dc.identifier.citationLafourcade, P., Gerali, A., Bruha, J., Bursian, D., Buss, G., Corbo, V.,...Zeleznik, M. (2016). Labour market modelling in the light of the financial crisis. ECB Working Paper Series No. 175.en_GB
dc.description.abstractThis paper revisits the empirical relationship between unemployment and output, and its evolution following the financial crisis of 2008, with the aim of drawing potential consequences for labour market modelling strategies in place within the European System of Central Banks (ESCB). First, the negative correlation between output and unemployment (Okun's law) at cyclical frequencies is found to be a robust feature of macro data across time, countries and identification schemes. Focusing on the euro area, the financial distress seems to have altered the dynamics of output and unemployment mainly at lower frequencies, interpreted as trend developments by the statistical filters used in the analysis. Looking at the implications for modelling strategies, we propose an extension of the standard labour search and matching model in which financial frictions impinge directly on the labour market rather than on the capital market, opening the way to protracted and lagged response of employment after a "financial" crisis. In terms of policy implications, the importance of the interplay between financial and labour market frictions in trend developments should be read as strong support for an ambitious structural reform agenda in Europe, so as to make our labour (and goods) markets more flexible and resilient.en_GB
dc.publisherEuropean Central Banken_GB
dc.subjectLabor market -- Econometric modelsen_GB
dc.subjectGlobal Financial Crisis, 2008-2009en_GB
dc.subjectEuropean System of Central Banksen_GB
dc.subjectUnemployment -- Europeen_GB
dc.subjectEquilibrium (Economics)en_GB
dc.titleLabour market modelling in the light of the financial crisisen_GB
dc.rights.holderThe copyright of this work belongs to the author(s)/publisher. The rights of this work are as defined by the appropriate Copyright Legislation or as modified by any successive legislation. Users may access this work and can make use of the information contained in accordance with the Copyright Legislation provided that the author must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the prior permission of the copyright holder.en_GB
dc.contributor.creatorLafourcade, Pierre-
dc.contributor.creatorGerali, Andrea-
dc.contributor.creatorBruha, Jan-
dc.contributor.creatorBursian, Dirk-
dc.contributor.creatorBuss, Ginters-
dc.contributor.creatorCorbo, Vesna-
dc.contributor.creatorHaavio, Markus-
dc.contributor.creatorHakanson, Christina-
dc.contributor.creatorHledik, Tibor-
dc.contributor.creatorKatay, Gabor-
dc.contributor.creatorKulikov, Dmitry-
dc.contributor.creatorLozej, Matija-
dc.contributor.creatorMicallef, Brian-
dc.contributor.creatorPapageorgiou, Dimitris-
dc.contributor.creatorVanhala, Juuso-
dc.contributor.creatorZeleznik, Marin-
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