How important is imperfect competition in the product market for employment dynamics? To investigate this, we formulate a theoretical model of employment adjustment with imperfect competition in the product market, search frictions, and convex adjustment costs. From this model, we derive a...

Postel-Vinay and Robin’s (2002) sequential auction model is extended to allow for aggregate productivity shocks. Workers exhibit permanent differences in ability while firms are identical. Negative aggregate productivity shocks induce job destruction by driving the surplus of matches with low...

This paper studies the impact of long-run productivity growth on job finding and separation rates, and thus the unemployment rate, using a search and matching model. We incorporate disembodied technological progress and on-the-job search into the endogenous job separation model of Mortensen and...

In a standard search and matching framework, the labor market presents frictions while in the competitive product market the demand is infinitely elastic.To have a more realistic framework, some models abandon the assumption of infinite elasticity and consider a two-tier productive scheme in the...

Two papers have recently questioned the quantitative consistency of the search and matching models. Shimer (2005) has argued that a text-book matching model is unable to explain the cyclical variation of unemployment and vacancies in the U.S. economy. Costain and Reiter (2007) have found the...

This paper studies the impact of long-run productivity growth on job finding and separation rates, and thus the unemployment rate, using a search and matching model. We incorporate disembodied technological progress and on-the-job search into the endogenous job separation model of Mortensen and...