Replication data for: Endogenous Disasters

Principal Investigator(s): View help for Principal Investigator(s) Nicolas Petrosky-Nadeau; Lu Zhang; Lars-Alexander Kuehn

Version: View help for Version V1

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DataCodesAER			10/27/2021 09:39:AM
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Project Citation:

Petrosky-Nadeau, Nicolas, Zhang, Lu, and Kuehn, Lars-Alexander. Replication data for: Endogenous Disasters. Nashville, TN: American Economic Association [publisher], 2018. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E112904V1

Project Description

Summary: Market economies are intrinsically unstable. The standard search model of equilibrium unemployment, once solved accurately with a globally nonlinear algorithm, gives rise endogenously to rare disasters. Intuitively, in the presence of cumulatively large negative shocks, inertial wages remain relatively high, and reduce profits. The marginal costs of hiring run into downward rigidity, which stems from the trading externality of the matching process, and fail to decline relative to profits. Inertial wages and rigid hiring costs combine to stifle job creation flows, depressing the economy into disasters. The disaster dynamics are robust to extensions to home production, capital accumulation, and recursive utility.

Scope of Project

Subject Terms: rare disasters; labor search frictions; Macroeconomics; asset pricing

JEL Classification:
      E22 Investment; Capital; Intangible Capital; Capacity
      E23 Macroeconomics: Production
      E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      E32 Business Fluctuations; Cycles
      J41 Labor Contracts
      J63 Labor Turnover; Vacancies; Layoffs
      N12 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: 1913-

Geographic Coverage: World

Time Period(s): 1790 – 2013

Universe: Many developed and developing countries in the world

Data Type(s): observational data; program source code; aggregate data

Methodology

Data Source: Barro-Ursua historical cross-country panel of real per capita output and consumption, World Development Indicators at the World Bank, Global Ficial Data, Dimson-Marsh-Staunton dataset of asset prices, NIPA, NBER macrohistory files, Federal Reserve Bank of St. Louis, Petrosky-Nadeau and Zhang historical series of unemployment and vacancy rates, Bureau of Labor Statistics

Unit(s) of Observation: Country, year,

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Published Versions

V1 [2019-10-12]

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