Leyva, Gustavo; Urrutia, Carlos - 2018
shocks in emerging economies. For this, we propose a small open economy business cycle model with frictional labor markets …, labor regulation, and an informal sector, modeled as self-employment. The model is calibrated to the Mexican economy, in … formal sector, are key to obtain a counter-cyclical informality rate. In our model both the economy without an informal …