Abstract

RODRIGUEZ RAMOS, Carlos  and  ALEMAR, Emanuelle. Dynamic Effects of Aggregate Supply and Demand and Productivity Shocks on Labor Demand: the Case of Puerto Rico. Econ: teor. práct [online]. 2022, n.56, pp.105-130.  Epub Apr 25, 2022. ISSN 2448-7481.  https://doi.org/10.24275/etypuam/ne/562022/rodriguez.

This paper analyzes the response of labor demand to aggregate supply and demand and productivity shocks through the structural identification scheme proposed by Blanchard and Quah (1989) and using the case of the economy of Puerto Rico. We show that the response of labor demand to productivity shocks is greater in the short run than to aggregate supply and demand shocks. However, demand shocks explain a greater proportion of unexpected labor demand fluctuations in the long run than supply shocks, while the effects of the shocks may persist for up to 10 years.

Keywords : Labor demand; structural vector autoregressive models; time series econometrics; dynamic analysis.