Bartolucci, Cristian - Collegio Carlo Alberto, Università degli Studi di Torino - 2011
This paper analyzes the impact of downward wage rigidity on the labor market. It shows that imposing downward wage rigidity in a matching model with cyclical fluctuations in productivity, endogenous match-destruction, and on-the-job search, quits are procyclical and layoffs countercyclical. It...