RBC models with search unemployment and wage renegotiation generate too much wage volatility and too stable unemployment rate. Shimer (2004) shows that it is possible to reproduce a volatility of unemployment similar to that observed in actual economies by imposing full real wage rigidity. We...

This paper is devoted to the problem of aggregation in models with quantity constraints. The focus is on quantity rationing macroeconomic (QRM) models where the micromarket outcome can be written as the minimum of several variables and where the diversity of situations across micromarkets is...

In this paper, we propose a search and matching model with nominal stickiness à la Calvo in the wage bargaining. We analyze the properties of the model, first, in the context of a typical real business cycle model driven by stochastic productivity shocks and second, in a fully specified...

We develop a model of equilibrium unemployment with endogenous real wages and productivity. We use a framework with explicit quantity constraints and aggregation over micromarkets to derive a Beveridge curve and discuss the relationship between shifts in the Beveridge curve and equilibrium...

We develop a model of equilibrium unemployment with endogenous real wages and productivity. We use a framework with explicit quantity constraints and aggregation over micromarkets to derive a Beveridge curve and discuss the relationship between shifts in the Beveridge curve and equilibrium...

RBC models with search unemployment and wage renegotiation generate too much wage volatility and too stable unemployment rate. Shimer (2004) shows that it is possible to reproduce a volatility of unemployment similar to that observed in actual economies by imposing full real wage rigidity. We...

Significant differences in unemployment incidence in Europe have been observed across skill groups, with the least skilled suffering the highest and most persistent unemployment rates. To identify policies alleviating this problem, we study the impact of reductions in employer social security...