Existing models of equilibrium unemployment with endogenous labor market participation are complex, generate … procyclical unemployment rates, and suffer from the usual defects of matching models. We embed endogenous participation in a … variabilities but also generates strongly countercyclical unemployment rates. Furthermore, the low labor supply elasticity implied …

unemployment is shown to be socially costly. The paper notes that a tax on revenue of the incumbent firms can be welfare improving …

averse agents, capital and a labor-leisure choice has the ability to match all moments of the ac- tual US-unemployment rate … be unable to generate the observed fuctuations in unemployment rates and give the reason for their failure …

response of wages to high unemployment can pose adjustment problems. We address the issue using extensive simulations of an …, unique equilibrium unemployment rate but with relatively slow convergence dynamics. The interaction between unemployment … deterministic and stochastic simulations. Resulting impulse-responses are analysed, as well as the distribution of unemployment …