Labor market participation, unemployment and monetary policy

We incorporate a participation decision in a standard New Keynesian model with matching frictions and show that treating the labor force as constant leads to incorrect evaluation of alternative policies. We also show that the presence of a participation margin mitigates the Shimer critique.

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Year of publication:	2014
Authors:	Campolmi, Alessia ; Gnocchi, Stefano
Publisher:	Ottawa : Bank of Canada
Subject:	Labour markets \| Business fluctuations and cycles \| Transmission of monetary policy

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Series:	Bank of Canada Working Paper ; 2014-9
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.34989/swp-2014-9 [DOI] 780535375 [GVK] hdl:10419/95708 [Handle] RePEc:bca:bocawp:14-9 [RePEc]
Classification:	E24 - Employment; Unemployment; Wages ; E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	EconStor

Persistent link: https://www.econbiz.de/10010335694