Real Business Cycles with Involuntary Unemployment

We develop and analyse a real business cycle model in which both goods and labour markets are characterized by imperfect competition. In equilibrium, unemployment emerges as the result of the market power exercised by insiders at the firm level. We show that a calibrated version of the model is capable of generating both a procyclical labour supply and a countercyclical unemployment rate, in a way qualitatively consistent with US data.

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Year of publication:	1995-06
Authors:	Galí, Jordi
Institutions:	C.E.P.R. Discussion Papers
Subject:	Endogenous Mark-ups \| Insider-Outsider Models \| Real Business Cycles \| Unemployment

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1206
Classification:	E32 - Business Fluctuations; Cycles ; J64 - Unemployment: Models, Duration, Incidence, and Job Search
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005656397