اصطکاک های بازار کار و مکانیزم انتشار بین المللی

The paper studies the role of labor market frictions in accounting for international business cycle comovement. To this aim, we embed labor market search and matching frictions in a two-country New Keynesian model. We show that labor market frictions amplify the international propagation of supply and demand shocks. In terms of cyclical properties then, they raise the cross-country output correlation. Adding labor market search in the New Keynesian model thus improves its ability to account for the business cycle comovement observed in G7 countries in the recent decades. Nominal wage rigidity substantially contributes to this result. Labor market institutions also play a role. Yet, their impact is not unequivocal depending on the institution considered. Business cycle synchronization is thus found to increase with the generosity of the unemployment benefits system, whereas it decreases with the strictness of employment protection.

There is a longstanding interest in the determinants of international business cycle interdependence, as attested by the central place devoted to understanding the international propagation of shocks in the traditional international macroeconomics textbooks. The topic has been substantially renewed in the last decades with the emergence of the international Real Business Cycle (RBC) literature (Backus et al., 1995). Two limits of this literature may be underlined though. First, international RBC models that typically assume flexible prices in a pure walrasian setting fail to account for some key dimensions of international stylized facts. In particular, the predicted cross-country GDP correlation is too low as compared to the data. Hairault (2002) shows the improving role of introducing labor market search and matching frictions á la Pissarides (1990) in the international RBC model, as it helps to better account for the propagation of international fluctuations arising from productivity shocks.

The paper evaluates the role of labor market frictions in accounting for international GDP comovement. To this aim, we embed labor market search and matching frictions in a two-country New Keynesian model. We find that labor market search frictions enlarge the magnitude of international business cycle synchronization. The cross-country correlations of employment, investment and output are higher in presence of labor market frictions, thereby making the New Keynesian model closer to the data. We show that both nominal and real labor market rigidities matter in this result. The larger the degree of wage stickiness, the stronger the extent of GDP comovement. Labor market institutions, that affect the labor market structural functioning, are also shown to affect the magnitude of international business cycle synchronization. Interestingly, their impact is not unequivocal among the dimensions of labor market institutions considered. We find that business cycle comovement increases with more generous unemployment benefits, while it decreases with the strictness of employment protection. An empirical exercise confirms that these predictions are supported by the data in OECD countries.