This paper examines the impact of unemployment insurance on the propagation of monetary disturbances in a staggered price model of the business cycle. To motivate a role for risk sharing behavior, I construct a quantitative equilibrium model that gives prominence to an efficiency-wage theory of...

We estimate an optimization-based model with sticky prices alone (SP model) and one that combines nominal and real rigidities in the form of costly price and labor adjustments (NRR model) over the U.S. postwar time period. We then compare their ability to generate persistent, positive, responses...