SLIDE 1
Capital Values, Job Values, and the Joint Behavior
- f Hiring and Investment
Capital Values, Job Values, and the Joint Behavior of Hiring and - - PowerPoint PPT Presentation
Capital Values, Job Values, and the Joint Behavior of Hiring and - - PowerPoint PPT Presentation
Capital Values, Job Values, and the Joint Behavior of Hiring and Investment Eran Yashiv Discussion by David Weiss June 22, 2014 Mazel Tov! Idea Hiring (investment) depend on value of a worker (capital). Volatile. Want to understand
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Idea
◮ Hiring (investment) depend on value of a worker (capital). ◮ Volatile. Want to understand them. ◮ MB (PV) = MC. Not directly observable. ◮ Infer from an estimated structural model. ◮ Eran: Maybe MC of workers & capital move together?
SLIDE 4
Idea
◮ Hiring (investment) depend on value of a worker (capital). ◮ Volatile. Want to understand them. ◮ MB (PV) = MC. Not directly observable. ◮ Infer from an estimated structural model. ◮ Eran: Maybe MC of workers & capital move together?
SLIDE 5
Idea
◮ Hiring (investment) depend on value of a worker (capital). ◮ Volatile. Want to understand them. ◮ MB (PV) = MC. Not directly observable. ◮ Infer from an estimated structural model. ◮ Eran: Maybe MC of workers & capital move together?
SLIDE 6
Idea
◮ Hiring (investment) depend on value of a worker (capital). ◮ Volatile. Want to understand them. ◮ MB (PV) = MC. Not directly observable. ◮ Infer from an estimated structural model. ◮ Eran: Maybe MC of workers & capital move together?
SLIDE 7
Idea
◮ Hiring (investment) depend on value of a worker (capital). ◮ Volatile. Want to understand them. ◮ MB (PV) = MC. Not directly observable. ◮ Infer from an estimated structural model. ◮ Eran: Maybe MC of workers & capital move together?
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What to do?
◮ Partial equilibrium RBC model. KISS Principle. ◮ Key: Use ’g’ function- interaction of investment and hiring in
marginal costs. Shocks to demand (PV).
◮ Adjustment costs => rents. ◮ Data on GDP, capital, investment, hiring, prices of investment ◮ See what estimates give. Gets reasonable costs. Pro cyclical
investment, countercyclical hiring. Best to coordinate hiring/investing.
◮ Compare with search literature/finance literature.
SLIDE 9
What to do?
◮ Partial equilibrium RBC model. KISS Principle. ◮ Key: Use ’g’ function- interaction of investment and hiring in
marginal costs. Shocks to demand (PV).
◮ Adjustment costs => rents. ◮ Data on GDP, capital, investment, hiring, prices of investment ◮ See what estimates give. Gets reasonable costs. Pro cyclical
investment, countercyclical hiring. Best to coordinate hiring/investing.
◮ Compare with search literature/finance literature.
SLIDE 10
What to do?
◮ Partial equilibrium RBC model. KISS Principle. ◮ Key: Use ’g’ function- interaction of investment and hiring in
marginal costs. Shocks to demand (PV).
◮ Adjustment costs => rents. ◮ Data on GDP, capital, investment, hiring, prices of investment ◮ See what estimates give. Gets reasonable costs. Pro cyclical
investment, countercyclical hiring. Best to coordinate hiring/investing.
◮ Compare with search literature/finance literature.
SLIDE 11
What to do?
◮ Partial equilibrium RBC model. KISS Principle. ◮ Key: Use ’g’ function- interaction of investment and hiring in
marginal costs. Shocks to demand (PV).
◮ Adjustment costs => rents. ◮ Data on GDP, capital, investment, hiring, prices of investment ◮ See what estimates give. Gets reasonable costs. Pro cyclical
investment, countercyclical hiring. Best to coordinate hiring/investing.
◮ Compare with search literature/finance literature.
SLIDE 12
What to do?
◮ Partial equilibrium RBC model. KISS Principle. ◮ Key: Use ’g’ function- interaction of investment and hiring in
marginal costs. Shocks to demand (PV).
◮ Adjustment costs => rents. ◮ Data on GDP, capital, investment, hiring, prices of investment ◮ See what estimates give. Gets reasonable costs. Pro cyclical
investment, countercyclical hiring. Best to coordinate hiring/investing.
◮ Compare with search literature/finance literature.
SLIDE 13
What to do?
◮ Partial equilibrium RBC model. KISS Principle. ◮ Key: Use ’g’ function- interaction of investment and hiring in
marginal costs. Shocks to demand (PV).
◮ Adjustment costs => rents. ◮ Data on GDP, capital, investment, hiring, prices of investment ◮ See what estimates give. Gets reasonable costs. Pro cyclical
investment, countercyclical hiring. Best to coordinate hiring/investing.
◮ Compare with search literature/finance literature.
SLIDE 14
The ’g’ Function Agenda
◮ Yashiv and Merz (2007)- Helps understand firm market
valuations.
◮ Yashiv and Faccini (2014 wp)-Important for understanding
inflation.
◮ Yashiv (2014)- Important for understanding hiring/investment
rates
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The ’g’ Function Agenda
◮ Yashiv and Merz (2007)- Helps understand firm market
valuations.
◮ Yashiv and Faccini (2014 wp)-Important for understanding
inflation.
◮ Yashiv (2014)- Important for understanding hiring/investment
rates
SLIDE 16
The ’g’ Function Agenda
◮ Yashiv and Merz (2007)- Helps understand firm market
valuations.
◮ Yashiv and Faccini (2014 wp)-Important for understanding
inflation.
◮ Yashiv (2014)- Important for understanding hiring/investment
rates
SLIDE 17
Where to go from here?
More micro model
◮ Firm entry/growth & the relationship between hiring &
investment
◮ Take view that shock to demand (PV) => marginal costs
- change. Shocks to costs, not demand?
Look at more stuff based on this notion
◮ Implications of taxes not well studied
◮ I bring this up because: V/N U/N Time Series
◮ Dramatic cut of corporate/dividend taxes in 1980s. Rise in
borrowing.
◮ Argument that this led to great moderation. ◮ Maybe jobless recoveries? Erem Atesagaoglu
SLIDE 18
Where to go from here?
More micro model
◮ Firm entry/growth & the relationship between hiring &
investment
◮ Take view that shock to demand (PV) => marginal costs
- change. Shocks to costs, not demand?
Look at more stuff based on this notion
◮ Implications of taxes not well studied
◮ I bring this up because: V/N U/N Time Series
◮ Dramatic cut of corporate/dividend taxes in 1980s. Rise in
borrowing.
◮ Argument that this led to great moderation. ◮ Maybe jobless recoveries? Erem Atesagaoglu
SLIDE 19
Where to go from here?
More micro model
◮ Firm entry/growth & the relationship between hiring &
investment
◮ Take view that shock to demand (PV) => marginal costs
- change. Shocks to costs, not demand?
Look at more stuff based on this notion
◮ Implications of taxes not well studied
◮ I bring this up because: V/N U/N Time Series
◮ Dramatic cut of corporate/dividend taxes in 1980s. Rise in
borrowing.
◮ Argument that this led to great moderation. ◮ Maybe jobless recoveries? Erem Atesagaoglu
SLIDE 20
Where to go from here?
More micro model
◮ Firm entry/growth & the relationship between hiring &
investment
◮ Take view that shock to demand (PV) => marginal costs
- change. Shocks to costs, not demand?
Look at more stuff based on this notion
◮ Implications of taxes not well studied
◮ I bring this up because: V/N U/N Time Series
◮ Dramatic cut of corporate/dividend taxes in 1980s. Rise in
borrowing.
◮ Argument that this led to great moderation. ◮ Maybe jobless recoveries? Erem Atesagaoglu
SLIDE 21
Where to go from here?
More micro model
◮ Firm entry/growth & the relationship between hiring &
investment
◮ Take view that shock to demand (PV) => marginal costs
- change. Shocks to costs, not demand?
Look at more stuff based on this notion
◮ Implications of taxes not well studied
◮ I bring this up because: V/N U/N Time Series
◮ Dramatic cut of corporate/dividend taxes in 1980s. Rise in
borrowing.
◮ Argument that this led to great moderation. ◮ Maybe jobless recoveries? Erem Atesagaoglu
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A Few Minor Comments
◮ Separation rates perhaps should be gross as well. Currently
uses ψ = EN+EU
E
. Why not ψ = EN+EU+EE
E
?
◮ Finds that Qn is countercyclical, as hiring rates countercyclical.
◮ We have data that perhaps can relate to this- Haefke et al
(2010) finds that elasticity of wages wrt productivity > 1
SLIDE 23
A Few Minor Comments
◮ Separation rates perhaps should be gross as well. Currently
uses ψ = EN+EU
E
. Why not ψ = EN+EU+EE
E
?
◮ Finds that Qn is countercyclical, as hiring rates countercyclical.
◮ We have data that perhaps can relate to this- Haefke et al
(2010) finds that elasticity of wages wrt productivity > 1
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Cool!
◮ Nice paper. I learned a lot! Thanks for having me discuss. ◮ Some interesting avenues for future work.
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Erem Atesagaoglu
Figure:
Back .
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More Erem Atesagaoglu
Figure:
Back .
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UV Rates
Figure:
Back .
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Time Series
Figure:
Back .