TY - BOOK ID - 11263262 TI - Emerging Market Business Cycles : The Role of Labor Market Frictions AU - Boz, Emine. AU - Durdu, Ceyhun Bora. AU - Li, Nan. AU - International Monetary Fund. PY - 2012 VL - WP/12/237 SN - 1475511205 1475512511 147551249X 1283866633 1475572778 9781475512496 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Business & Economics KW - Economic Theory KW - Business cycles. KW - Business forecasting. KW - Business KW - Business forecasts KW - Forecasting, Business KW - Economic cycles KW - Economic fluctuations KW - Forecasting KW - Economic forecasting KW - Cycles KW - Business cycles KW - Labor market KW - Econometric models KW - E-books KW - Employees KW - Market, Labor KW - Supply and demand for labor KW - Markets KW - Supply and demand KW - Labor KW - Macroeconomics KW - Production and Operations Management KW - Open Economy Macroeconomics KW - Economic Growth of Open Economies KW - Employment KW - Unemployment KW - Wages KW - Intergenerational Income Distribution KW - Aggregate Human Capital KW - Aggregate Labor Productivity KW - Financial Markets and the Macroeconomy KW - Demand and Supply of Labor: General KW - Wages, Compensation, and Labor Costs: General KW - Unemployment: Models, Duration, Incidence, and Job Search KW - Macroeconomics: Consumption KW - Saving KW - Wealth KW - Production KW - Cost KW - Capital and Total Factor Productivity KW - Capacity KW - Labour KW - income economics KW - Labor markets KW - Consumption KW - Total factor productivity KW - National accounts KW - Economics KW - Industrial productivity KW - Mexico KW - Income economics UR - https://www.unicat.be/uniCat?func=search&query=sysid:11263262 AB - Emerging economies are characterized by higher consumption and real wage variability relative to output and a strongly countercyclical current account. A real business cycle model of a small open economy that embeds a Mortensen-Pissarides type of search-matching frictions and countercyclical interest rate shocks can jointly account for these regularities. In the face of countercyclical interest rate shocks, search-matching frictions increase future employment uncertainty, improving workers’ incentive to save and generating a greater response of consumption and the current account. Higher consumption response in turn feeds into larger fluctuations in the workers’ bargaining power while the interest rates shocks lead to variations in the firms’ willingness to hire; both of which contribute to a highly variable real wage. ER -