NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Testing for Keynesian Labor Demand

Mark Bils, Peter J. Klenow, Benjamin A. Malin

Chapter in NBER book NBER Macroeconomics Annual 2012, Volume 27 (2013), Daron Acemoglu, Jonathan Parker, and Michael Woodford, editors (p. 311 - 349)
Conference held April 20-21, 2012
Published in May 2013 by University of Chicago Press
© 2013 by the National Bureau of Economic Research
in NBER Book Series NBER Macroeconomics Annual

According to the textbook Keynesian model, short-run demand for labor is sensitive to the demand for goods. In this view, sellers deviate from setting the marginal product of labor proportional to the real wage, instead enduring or choosing lower price markups when demand for goods is high. We test this prediction across U.S. industries in the two decades up through the Great Recession. To identify movements in goods demand, we exploit how durability varies across 70 categories of consumption and investment. We also take into account the flexibility of prices and capital-intensity of production across goods. We find evidence in support of Keynesian Labor Demand.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from Amazon.com

You may be able to access the full text of this document through JSTOR.

An online appendix is available for this publication.

This paper was revised on June 6, 2012

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.1086/669182

This chapter first appeared as NBER working paper w18149, Testing for Keynesian Labor Demand, Mark Bils, Peter J. Klenow, Benjamin A. Malin
Commentary on this chapter:
  Comment, Ricardo Reis
  Comment, Julio J. Rotemberg
  Discussion,
Users who downloaded this chapter also downloaded these:
Rotemberg Comment on "Testing for Keynesian Labor Demand"
Discussion of "Testing for Keynesian Labor Demand"
Reis Comment on "Testing for Keynesian Labor Demand"
Hall Labor Demand, Labor Supply, and Employment Volatility
Bils, Klenow, and Malin w18149 Testing for Keynesian Labor Demand
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us