Krause, Michael (contributor); Lubik, Thomas A. (contributor) - 2007
We show how on-the-job search and the propagation of shocks to the economy are intricately linked. Rising search by … employed workers in a boom amplifies the incentives of firms to post vacancies. In turn, more vacancies increases job search …. By keeping job creation costs low for firms, on-the-job search greatly amplifies shocks. In our baseline calibration …