Schmidt-Dengler, Philipp - In: Journal of Applied Econometrics 18 (2003) 1, pp. 113-118
A recent article (Collard et al., 2002) published in this journal presented a structural model of aggregate job flows. Unrestricted estimation of the model yields parameter estimates that would imply an unemployment rate of 99%. Instead of solving this problem by fixing one of the parameters, as...