01957cas a2200265 a 4500 AALejournalIMF013120 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475511208 1018-5941 BD-DhAAL BD-DhAAL Boz, Emine. Emerging Market Business Cycles : The Role of Labor Market Frictions / Emine Boz, Ceyhun Bora Durdu, Nan Li. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (51 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Durdu, Ceyhun Bora. Li, Nan. IMF Working Papers; Working Paper ; No. 2012/237 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/237/001.2012.issue-237-en.xml IMF e-Library