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| Michel C. de Souza |
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| ''On the transmission of us uncertainty shocks to the European labor market'' |
| ( 2023, Vol. 43 No.4 ) |
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| We investigate the effects of a United States uncertainty shock on the European Union labor market by proposing a two-country Dynamic Stochastic General Equilibrium (DSGE) model with search and matching frictions and comparing the impulse response functions with data from twelve economies in a Bayesian Global Vector Autoregression (BGVAR) framework. Our results indicate that the Euro response is similar to a negative aggregate demand shock in the first eighteen months. However, afterward, the labor market frictions and trade intensity drive a stagflation process. |
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| Keywords: Uncertainty, Labor, Trade |
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
D8 - Information, Knowledge, and Uncertainty: General |
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| Manuscript Received : May 27 2022 | | Manuscript Accepted : Dec 30 2023 |
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