Labor hours, employment, and “the great moderation”

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


It is well established that U.S. business cycles have moderated since the mid 1980s, which include a decline in the volatility of hours and of the unemployment rate. This chapter applies a battery of tests to a Real Business Cycle (RBC) framework to dissect the effect of greater international integration, financial frictions, and better monetary policy on the dynamics of labor hours. While some of these factors have been identified in the literature as causes of the ‘Great Moderation’, a model-based comprehensive assessment of their relative importance, as the one presented in this chapter, is novel and sheds light into the policies that aid towards a smoother functioning of the labor market.

Original languageEnglish
Title of host publicationEmployment and Labor Issues
Subtitle of host publicationUnemployment, Youth Employment and Child Labor
PublisherNova Science Publishers, Inc.
Number of pages12
ISBN (Electronic)9781611228854
ISBN (Print)9781608762828
StatePublished - 1 Jan 2010


  • Great moderation
  • Labor hours
  • Volatility


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