TY  - JOUR
AU  - Quandt,R)chard E.
AU  - Rosen,Harvey S.
TI  - Endogenous Output in an Aggregate Model of the Labor Market
JF  - National Bureau of Economic Research Technical Working Paper Series
VL  - No. 74
PY  - 1989
Y2  - 1989
UR  - http://www.nber.org/papers/t0074
L1  - http://www.nber.org/papers/t0074.pdf
N1  - Author contact info:
Harvey S. Rosen
Department of Economics
Fisher Hall
Princeton University
Princeton, NJ 08544-1021
Tel: 609/258-4022
Fax: 609/258-6419
E-Mail: HSR@princeton.edu
AB  - A common feature to most aggregative studies of the labor market is a marginal productivity expression in which the quantity of labor appears on the left hand side of the equation, and the right hand side includes the real wage and output. A number of researchers have cautioned that if the output variable is treated as exogenous, serious econometric difficulties may result. However, the assumption that output is exogenous has not been tested. In this paper, we estimate an equilibrium model of the labor market, and use it to test the assumption of output exogeneity. We find that the assumption that output is exogenous cannot be rejected by the data.
ER  -