in the discount factor. A comparison with the standard productivity shock is provided. Movements in the discount factor …In this paper we investigate the labor market dynamics in a matching model where fluctuations are driven by movements … that the canonical matching model under a very standard calibration is able to generate an important volatility of …

market sorting, and aggregate shocks. In response to a positive productivity shock, incentives to sort increase …I study a dynamic search-matching model with two-sided heterogeneity, a production complementarity that induces labor … disproportionately. Firms respond by posting additional vacancies, and the strength of the response is increasing in firm productivity …

The search and matching model of the labor market has become the workhorse for analyzing unemployment dynamics and the … business cycle transmission mechanism. However, many quantitative studies of the search and matching framework argue that it is … and matching framework using Bayesian methods. I show that the model has extremely weak internal propagation and that …