Real wage rigidity and the unemployment volatility puzzle in small open economies
研究了在小型开放经济中，实际工资刚性是否足以解决劳动力市场变量对生产率冲击反应不足的波动性之谜，发现贸易条件变动会削弱工资刚性的效果。
Standard search models of the labour market feature a volatility puzzle: labour market variables move too little in response to productivity shocks. I investigate if real wage rigidity is sufficient to solve this in an open economy. Starting from a closed economy benchmark in which wage rigidity makes labour market variables sufficiently volatile, I find that the puzzle reopens in the open economy, despite a rigid real wage. This is because terms of trade movements move the wedge between the consumer and producer real wage in such a way that labour market variables respond less to productivity shocks. A quantitative exercise shows that the effect of this mechanism can be sizeable.