M. Alper Çenesiz

RESEARCH PAPERS

The Cyclicality of Job Search Effort in Matching Models (with Luís Guimarães). Oxford Economic Papers (2022) (open access)

The canonical matching model is the workhorse model of the labour market but lacks a proper amplification mechanism for productivity shocks. One way to amplify the effects of shocks is to allow workers to endogenously adjust their job search effort: as search effort is procyclical in the canonical model, volatilities increase. Yet, the empirical literature points against procyclical search effort, raising doubts of how acyclical (or counteryclical) search effort can coincide with volatile labour market variables in matching models. We show that they can coincide in a model with procyclical value of leisure and alternating-offer wage bargaining.

Working Paper Version, Version 1.1 with the old title 'Income Effects and the Cyclicality of Job Search Effort' .

COVID-19: What If Immunity Wanes? (with Luís Guimarães). DOI: Canadian Journal of Economics (2022) (open access)

Using a simple economic model in which social-distancing reduces contagion, we study the implications of waning immunity for the epidemiological dynamics and social activity. If immunity wanes, we find that COVID-19 likely becomes endemic and that social-distancing is here to stay until the discovery of a vaccine or cure. But waning immunity does not necessarily change optimal actions on the onset of the pandemic. Decentralized equilibria are virtually independent of waning immunity until close to peak infections. For centralized equilibria, the relevance of waning immunity decreases in the probability of finding a vaccine or cure, the costs of infection (e.g., infection-fatality rate), the degree of partial immunity, and the presence of other NPIs that lower contagion (e.g., quarantining and mask use). In simulations calibrated to July 2020, our model suggests that waning immunity is virtually unimportant for centralized equilibria until at least 2021. This provides vital time for individuals and policymakers to learn about immunity against SARS-CoV-2 before it becomes critical.

Working Paper Version, Slides, Version 1.0, also available as CEPR Covid Economics, Vetted and Real-Time Papers, and a nontechnical summary blog post John Lewis wrote for Bank Underground.

Measuring the Size of the Informal Tourism Economy in Thailand (with Erdinç Çakmak). International Journal of Tourism Research (2020)

This study is the first to estimate the size of the informal tourism economy. Using a dynamic general equilibrium model, this paper first estimates the size of the informal tourism economy and then assesses its linkages to key labour market variables in Thailand. Empirical results indicate that: (a) the informal tourism economy grows faster than the formal tourism and aggregate economy; (b) both formal and informal tourism economies absorb the unemployed; (c) the relationship between formal and informal economies is negative in the aggregate but positive in the tourism sector.

Sticky Price Models, Durable Goods, and Real Wage Rigidities (with Luís Guimarães). Journal of Money, Credit & Banking (2019)

The standard two-sector New Keynesian model with durable goods is at odds with conventional wisdom and vector autoregression (VAR) evidence: Following a monetary shock, the model generates (i) either negative or no comovement across sectoral outputs and (ii) aggregate neutrality of money when durable goods' prices are flexible. We reconcile theory with evidence by incorporating real wage rigidities into the standard model: As long as durable goods' prices are more flexible than nondurable goods' prices, we obtain positive sectoral comovement and, thus, aggregate nonneutrality of money.

Working Paper Version

Sports and (Real) Business Cycles (with Christian Pierdzioch). Applied Economics Letters (2015)

We extend a basic real business cycle model to incorporate households doing sports. Households decide on spending time at the workplace and spending time on doing sports. Sports acts as an investment in health and, thereby, affects total factor productivity. We study the implications of sports for the propagation of technology shocks and for the volatility and persistence of output at business cycle frequencies.

Published Version

Financial Market Integration, Costs of Adjusting Hours Worked, and Monetary Policy (with Christian Pierdzioch). Economic Notes (2010)

Based on a dynamic stochastic general equilibrium model featuring a labour-market friction in the form of costs of adjusting hours, we analyse how financial market integration affects the propagation of monetary policy in an open economy. The main result of our analysis is that costs of adjusting hours worked substantially dampen the increase in the effect of monetary policy on output and hours worked brought about by financial market integration.

Published Version

Capital Mobility and Labor Market Volatility (with Christian Pierdzioch). International Economics & Economic Policy (2010)

We used a dynamic two-country optimizing model featuring efficiency wages to analyze the implications of capital mobility for labor market volatility. Capital mobility magnifies the short-run effects of productivity shocks and monetary shocks on employment and the real wage, but dampens the medium-run effects. The overall effects of capital mobility on the volatility and the cyclical properties of employment and the real wage are moderate.

Published Version

Efficiency Wages, Financial Market Integration, and the Fiscal Multiplier (with Christian Pierdzioch). Journal of International Money & Finance (2009)

We used a “new-open economy macroeconomic” model featuring a labor-market friction in the form of efficiency wages to analyze the implications of financial market integration for the fiscal multiplier. The fiscal multiplier measures the accumulated effect of fiscal policy on output. Conventional wisdom based on the basic textbook version of the classic Mundell–Fleming model suggests that the fiscal multiplier should become smaller as financial markets become more integrated. We show that a labor-market friction in the form of efficiency wages implies that financial market integration should increase the fiscal multiplier.

Published Version

Labor-Market Search, Financial Market Integration, and the Fiscal Multiplier (with Christian Pierdzioch). Review of International Economics (2009)

We used a two-country optimizing “new-open-economy macroeconomics” model to analyze the implications of financial market integration for the fiscal multiplier. The fiscal multiplier measures the accumulated effect of fiscal policy on output. Our model features a labor-market friction in the form of labor-market search. The conventional wisdom derived from the basic textbook version of the classic Mundell–Fleming model has been that financial market integration diminishes the fiscal multiplier. We show that labor-market search implies that financial market integration should increase rather than decrease the fiscal multiplier.

Published Version

Financial Market Integration, Labor Markets, and Macroeconomic Policies (with Christian Pierdzioch). International Review of Economics & Finance (2008)

We used a dynamic two-country optimizing model featuring a labor–market friction to analyze the implications of financial market integration for the propagation of macroeconomic policies in an open economy. Our main result is that the labor–market friction we analyzed substantially reduces the magnitude of the effect of financial market integration on the propagation of macroeconomic policies.

Published Version