<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>We study the impact of several Covid-19 related supply shocks. We use a standard wage setting-price setting model of the labor market and analyze the transmission of the shocks to the natural rate of unemployment and production. In a first step, the shocks are analyzed in a general way, graphically and algebraically. In a second step, numerical examples illustrate the effects on the real wage and the labor market equilibrium as well as output. Our theoretical results indicate that the negative supply shocks related to the Covid-19 pandemic are associated with a decline in the natural level of output and employment. Our results are supported by empirical evidence across various countries. However, limitations of the theoretical model can be considerable.</p>
</abstract>

We study the impact of several Covid-19 related supply shocks. We use a standard wage setting-price setting model of the labor market and analyze the transmission of the shocks to the natural rate of unemployment and production. In a first step, the shocks are analyzed in a general way, graphically and algebraically. In a second step, numerical examples illustrate the effects on the real wage and the labor market equilibrium as well as output. Our theoretical results indicate that the negative supply shocks related to the Covid-19 pandemic are associated with a decline in the natural level of output and employment. Our results are supported by empirical evidence across various countries. However, limitations of the theoretical model can be considerable.

Labor market effects of COVID-19 shocks

International Journal of Management and Economics

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Labor market effects of COVID-19 shocks"}

We study the impact of several Covid-19 related supply shocks. We use a standard wage setting-price setting model of the labor market and analyze the...

Labor market effects of COVID-19 shocks

Article Category: Conceptual Paper

Online veröffentlicht: 31. März 2023

Seitenbereich: 3 - 12

Eingereicht: 08. Juni 2022

Akzeptiert: 14. Dez. 2022

DOI: https://doi.org/10.2478/ijme-2023-0001

Schlüsselwörter
labor market, natural rate of unemployment, supply shocks

© 2023 Michael Frenkel et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Labor market effects of COVID-19 shocks

Article Category: Conceptual Paper

Online veröffentlicht: 31. März 2023

Seitenbereich: 3 - 12

Eingereicht: 08. Juni 2022

Akzeptiert: 14. Dez. 2022

DOI: https://doi.org/10.2478/ijme-2023-0001

Schlüsselwörterlabor market, natural rate of unemployment, supply shocks

© 2023 Michael Frenkel et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Schlüsselwörter
labor market, natural rate of unemployment, supply shocks