Blanco, Julio; Drenik, Andres; Moser, Christian; … - 2022
We develop a model of a frictional labor market with idiosyncratic and aggregate shocks, sticky wages, and two …-sided lack of commitment between workers and firms. In this environment, wages are allocative in the sense that inefficient job … inefficient job separations as well as the aggregate response of employment and real wages to monetary shocks …