In this paper, we investigate whether business cycles can imply sizable effects on average unemployment. First, using a reduced-form model of the labor market, we show that job finding rate fluctuations generate intrinsically a non-linear effect on unemployment: positive shocks reduce...

This paper documents the heterogeneity in labor market volatility across ages and gender in the United States over 1976-2014. We separate fluctuations in hours worked into fluctuations in the average number of hours per worker (the intensive margin) and fluctuations in the number of individuals...

We analytically characterize the aggregate productivity loss from allocative distortions in a setting that accounts for the sectoral linkages of production. We show that the effects of distortions and the role of sectoral linkages depend crucially on how substitutable inputs are. We find that...

endogenous, provided the structural model is able to reproduce its volatility. Moreover, the matching model embeds other non-linearities, which alter the average job finding rate and consequently the business cycle cost.

In this paper, we investigate whether business cycles can imply sizable effects on average unemployment. First, using a reduced-form model of the labor market, we show that job finding rate fluctuations generate intrinsically a non-linear effect on unemployment: positive shocks reduce...

We investigate the welfare cost of business cycles implied by matching frictions. First, using the reduced-form of the matching model, we show that job finding rate fluctuations generate intrinsically a non-linear effect on unemployment: positive shocks reduce unemployment less than negative...

RThis paper proposes a novel decomposition of aggregate productivity to evaluate the role of resource reallocation for the cyclical dynamics of aggregate productivity. The decomposition, which is derived from the aggregation of heterogeneous firm-level production functions, accounts for changes...

Recessions are conventionally considered as times when the least productive rms are driven out of the market. Do credit frictions hamper this cleansing eect of recessions? We build and calibrate a model of rm dynamics with endogenous exit and credit frictions to investigate this question. We nd...