period. The workers' bargaining power in the hours negotiation affects both unemployment volatility and inflation persistence …. The closer to zero this parameter, (i) the more firms adjust on the intensive margin, reducing employment volatility, (ii … the new entrants wage rigidity required to match observed unemployment volatility. …

In this paper we incorporate a labor market with matching frictions and wage rigidities into the New Keynesian business … cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation …

equilibrium (DSGE) models. Given the structure of DSGE models it may be difficult to determine whether a parameter is identified … not suffer from this difficulty and are relatively easy to compute. The first applies to DSGE models where the parameters … estimators. These results are illustrated by means of simple DSGE models. …

volatility of both inflation and unemployment differentials. Finally, we show that it is important to take into account the …

Standard macroeconomic models underpredict the volatility of unemployment fluctuations. A common solution is to assume … jobs. This form of wage rigidity does not affect job creation and thus cannot explain the unemployment volatility puzzle. …