In this work we provide a theoretical overview of a search equilibrium model with continuous productivity dispersion and perform its estimation for the Austrian data. We describe empirically the dynamics of market equilibrium outcomes. Special emphasis is made on the analysis of changes in...

It is common knowledge that the standard New Keynesian model is not able to generate a persistent response in output to temporary monetary shocks. We show that this shortcoming can be remedied in a simple and intuitively appealing way through the introduction of labor turnover costs (such as...