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Michel C. de Souza
''On the transmission of us uncertainty shocks to the European labor market''
( 2023, Vol. 43 No.4 )
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.
Keywords: Uncertainty, Labor, Trade
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
D8 - Information, Knowledge, and Uncertainty: General
Manuscript Received : May 27 2022 Manuscript Accepted : Dec 30 2023

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