We develop a novel, tractable New Keynesian model where firms post wages and workers search on the job, motivated by microeconomic evidence on wage setting. Because firms set wages to avoid costly turnover, the rate that workers quit their jobs features prominently in the model's wage Phillips...

This paper reviews evidence on the role of the labor market in driving inflation and analyzes the US labor market, and its contribution to inflation, during the COVID-19 pandemic and recovery. The author argues that the quits rate is a good measure of labor market tightness and is the best...