Unemployment arises from frictions in the matching of job-seekers and employers. The level of resources that employers … devote to evaluating applicants for jobs is a key factor in the magnitude of the frictions. Unemployment will be low if …-selection by job-seekers, so that they apply mainly for jobs where they are qualified, friction and thus unemployment will be low …

We set-up a real business cycle model with search and matching frictions driven by several shocks, which nests full … and Sweden). We conduct inference with mixed frequency data, combining quarterly series for unemployment, vacancies, GDP …, consumption, and investment, with annual data on unemployment flows. Parameters and shocks are estimated separately for each …

What is the driving force behind the cyclical behavior of unemployment and vacancies? What is the relation between job … and variable probability of an economic disaster. A high probability implies greater risk and lower future growth … unemployment rises. The model thus explains volatility in equity and labor markets, and the relation between the two …

This paper studies hours, employment, vacancies and unemployment at micro and macro levels. It is built around a set of … facts concerning the variability of unemployment and vacancies in the aggregate and, at the establishment level, the … distribution of net employment growth and the comovement of hours and employment growth. A search model with frictions in hiring …

This paper extends Lucas and Prescott's (1974) search model to develop a notion of rest unemployment. The economy … unemployment (moving to a new labor market or waiting for labor market conditions to improve) and inactivity (enjoying leisure … evaluate the model. Quantitatively, we find that in the U.S. economy many more people may be in rest unemployment than in …

This paper introduces a labor force participation choice into a labor market matching model embedded in a dynamic … of theory. Amongst the counterfactual implications are very low volatility of tightness, procyclical unemployment, and a …

We revisit the hypothesis that cyclical fluctuations in unemployment are caused by shocks to the discount rate. We use … in the EU rate. The response of the unemployment rate is minuscule. These findings are at odds with the actual behavior … large unemployment fluctuations. We show that aggregate productivity shocks generate the correct comovement between the UE …

This paper explains the divergent behavior of European and US unemployment rates using a job market matching model of … robust explanation for the European unemployment puzzle in the context of a matching model with both endogenous job creation … the labor market with an interaction between shocks and institutions. It shows that a reduction in TFP growth rates, an …

matching function. Wages are determined through Nash bargaining. We also consider aggregate productivity shocks, and a complete … set of contingent claims conditional on this risk.We use the model to evaluate a tax-financed unemployment insurance … stochastic ones---generate rather limited unemployment effects, unless workers are close to indifferent between working and not …