We study equilibrium wage and employment dynamics in a class of popular search models with wage posting, in the presence of aggregate productivity shocks. Firms offer and commit to (Markov) contracts, which specify a wage contingent on all payoff-relevant states, but must pay equally all of...

Workers face a trade-off between macroeconomic and individual incentives to work in different occupations/industries; namely, between search frictions and personal comparative advantages. Workers endowed with heterogeneous multi-dimensional skills search for jobs that require different skill...