NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Can Intangible Capital Explain Cyclical Movements in the Labor Wedge?

Francois Gourio, Leena Rudanko

NBER Working Paper No. 19900
Issued in February 2014
NBER Program(s):   EFG   ME

Intangible capital is an important factor of production in modern economies that is generally neglected in business cycle analyses. We demonstrate that intangible capital can have a substantial impact on business cycle dynamics, especially if the intangible is complementary with production capacity. We focus on customer capital: the capital embodied in the relationships a firm has with its customers. Introducing customer capital into a standard real business cycle model generates a volatile and countercyclical labor wedge, due to a mismeasured marginal product of labor. We also provide new evidence on cyclical variation in selling effort to discipline the exercise.

download in pdf format
   (97 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19900

Published: Fran?ois Gourio & Leena Rudanko, 2014. "Can Intangible Capital Explain Cyclical Movements in the Labor Wedge?," American Economic Review, American Economic Association, vol. 104(5), pages 183-88, May. citation courtesy of

Users who downloaded this paper also downloaded these:
Heathcote, Storesletten, and Violante w19899 Optimal Tax Progressivity: An Analytical Framework
Woodford w19897 An Optimizing Neuroeconomic Model of Discrete Choice
Gustman and Steinmeier w19902 The Role of Health in Retirement
Hulten and Hao w14548 What is a Company Really Worth? Intangible Capital and the "Market to Book Value" Puzzle
Wang and Whalley w19898 Are Chinese Markets for Manufactured Products More Competitive than in the US?: A Comparison of China -US Industrial Concentration Ratios
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

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

Contact Us