@TechReport{iza:izadps:dp4924,
            	author={Merkl, Christian and Schmitz, Tom},
            	title={Macroeconomic Volatilities and the Labor Market: First Results from the Euro Experiment},
            	year={2010},
	month={May},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={4924},
            	url={https://www.iza.org/publications/dp4924},
	abstract={This paper analyzes the effects of different labor market institutions on inflation and output volatility. The eurozone offers an unprecedented experiment for this exercise: since 1999, no national monetary policies have been implemented that could account for volatility differences across member states, but labor market characteristics have remained very diverse. We use a New Keynesian model with unemployment to predict the effects of different labor market institutions on macroeconomic volatilities. In our subsequent empirical estimations, we find that higher labor turnover costs have a statistically significant negative effect on output volatility, while replacement rates have a positive effect, both of which are in line with theory. While labor market institutions have a large effect on output volatility, they do not seem to have much of an effect on inflation volatility, which can also be rationalized by our theoretical model.},
	keywords={unemployment benefits;labor turnover costs;output and inflation volatility;labor market institutions;unemployment;eurozone},
            }