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Demand Uncertainty and Labour Input in a Bivariate ARCH-M Model

Published online by Cambridge University Press:  17 August 2016

Gebhard Flaig
Gebhard Flaig*
Affiliation:
Universität Augsburg
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Summary

This paper analyses the impact of input uncertainty on labour demand. An ARCH-M model is incorporated into an error-correction framework which allows to model both short- and long-run labour demand. The conditional variance of unexpected output changes serves as a proxy for demand uncertainty. The output and employment equations are estimated simultaneously for the West-German manufacturing sector.

Résumé

Résumé

Cet article analyse l'impact sur la demande de travail d'une incertitude sur les inputs. L'intégration d'un modèle ARCH-M dans un mécanisme de correction d'erreur permet de modéliser la demande de travail à la fois à court et à long terme. La variance conditionnelle des changements de production non-anticipés permet d'aproximer l'incertitude sur la demande. Les équations de production et d'emploi sont estimées simultanément pour le secteur manufacturier ouest-allemand.

Keywords

824211824211
Type
Part I: Labour Demand and Supply
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 58 , Issue 3-4: Output and Employment Fluctuations , 1992 , pp. 250 - 264
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1992 

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Footnotes

(*)

I thank seminar participants at the Free University of Berlin and three referees for helpful comments.

References

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