Endogenous Separations in a Matching Model
The paper develops a model in which employment is an enduring rent-sharing relationship. In each period rents are subject to a transient disturbance, and the parties weigh the future stream of benefits against current dis-benefits. The analysis suggests a strong correlation between real interest rates and aggregate unemployment because high real interest rates makes the employment relationship more fragile. This correlation is demonstrated for a number of time series of aggregate national data.
Year of publication: |
1991-06
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Authors: | Newell, A ; Symons, James |
Institutions: | Centre for Economic Performance, LSE |
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