How to calculate labror market distortion?
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Labor market distortion can be calculated by studying the role of market distortions on the emergence of indeterminacy and bifurcations. Lloyd-Braga, Modesto, and Seegmuller provide a methodology to analyze how market distortions influence the range of values for the elasticity of input substitution under which local indeterminacy and bifurcations occur . They introduce general specifications for the elasticities of the crucial functions defining the aggregate equilibrium dynamics of the model, allowing for the identification of the main channels and classes of distortions responsible for indeterminacy . By applying this methodology to the Woodford framework, they find that distortions in the capital market do not play a major role, while output market distortions require a high degree of distortion for indeterminacy . On the other hand, labor market distortions require a degree that is empirically plausible .
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| The article uses laboratory methods to evaluate determinants of supracompetitive pricing in laboratory markets. | |
| The paper does not provide a specific method for calculating labor market distortions. | |
| The paper does not provide information on how to calculate labor market distortion. | |
06 Sep 2018 10 Citations | The paper does not provide information on how to calculate labor market distortion. |
Open access•Posted Content | The paper does not provide a specific method for calculating labor market distortions. |
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