Paper #1266

Título:

Unemployment in an estimated new Keynesian model

Autores:

Jordi Galí, Frank Smets y Rafael Wouters

Fecha:

Marzo 2011

Resumen:

We reformulate the Smets-Wouters (2007) framework by embedding the theory of unemployment proposed in Gal� (2011a,b). We estimate the resulting model using postwar U.S. data, while treating the unemployment rate as an additional observable variable. Our approach overcomes the lack of identification of wage markup and labor supply shocks highlighted by Chari, Kehoe and McGrattan (2008) in their criticism of New Keynesian models, and allows us to estimate a "correct" measure of the output gap. In addition, the estimated model can be used to analyze the sources of unemployment fluctuations.

Palabras clave:

nominal rigidities, unemployment fluctuations, Phillips curve, wage markups shocks, output gap

Códigos JEL:

D58, E24, E31, E32

Área de investigación:

Macroeconomía y Economía Internacional

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