Questions tagged [frisch-elasticity]
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Infinite labor elasticity with frisch elasticity
It is from Hansen(1985)'s paper.
Suppose that household has utility function $u(c)+v(1-h)$ and they can choose probability to work($h$) as $\alpha$.
There is an insurance $b_t$ giving $1$ unit of ...
- 146
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votes
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Calibration of utility function parameters controlling labor disutility
Consider the very basic utility function
$$ u(c, n) = \log (c) - \alpha \frac{n^{1 + \frac{1}{\nu}}}{1 + \frac{1}{\nu}}$$
Where $c$ is consumption and $n$ is working hours. As the Frisch elasticity ...
- 10.6k
6
votes
1
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Generalized KPR: Frisch Elasticity
Consider the following version of KPR preferences (with $l$ being leisure):
$$ U(c,l) = \left(\left(c\right)^\gamma l^\omega\right)^{1-\sigma}$$
I'm after the Frisch elasticity:
$$ \frac{\partial(1-...
- 10.6k
6
votes
2
answers
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Unemployment and the Frisch-Elasticity
There is the long debate on the Frisch-Elasticity being the driver of unemployment over the business cycle.
One argument against the voluntary-unemployment mechanism of RBC models is that if we ...
- 10.6k