TY  - JOUR
AU  - Bils, Mark
AU  - Klenow, Peter J
AU  - Malin, Benjamin A
TI  - Testing for Keynesian Labor Demand
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18149
PY  - 2012
Y2  - June 2012
DO  - 10.3386/w18149
UR  - http://www.nber.org/papers/w18149
L1  - http://www.nber.org/papers/w18149.pdf
N1  - Author contact info:
Mark Bils
Department of Economics
University of Rochester
Rochester, NY 14627
Tel: 585/275-0488
Fax: 585/256-2309
E-Mail: mark.bils@rochester.edu

Peter J. Klenow
Department of Economics
579 Jane Stanford Way
Stanford University
Stanford, CA  94305-6072
Tel: 650/725-8169
Fax: NA
E-Mail: Klenow@Stanford.edu

Benjamin Malin
Federal Reserve Bank of Minneapolis
90 Hennepin Ave
Minneapolis, MN 55401
Tel: 612-204-5499
E-Mail: benjamin.malin@mpls.frb.org
M1  - published as Mark Bils, Peter J. Klenow, Benjamin A. Malin. "Testing for Keynesian Labor Demand," in Daron Acemoglu, Jonathan Parker, and Michael Woodford, editors, "NBER Macroeconomics Annual 2012, Volume 27" University of Chicago Press (2013)

M3  - presented at "27th Annual Conference on Macroeconomics", April 20-21, 2012
AB  - According to the textbook Keynesian model, short-run demand for labor is sensitive to the demand for goods.  In this view, sellers deviate from setting the marginal product of labor proportional to the real wage, instead enduring or choosing lower price markups when demand for goods is high.  We test this prediction across U.S. industries in the two decades up through the Great Recession.  To identify movements in goods demand, we exploit how durability varies across 70 categories of consumption and investment.  We also take into account the flexibility of prices and capital-intensity of production across goods.  We find evidence in support of Keynesian Labor Demand.
ER  -