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u* = √uv
Michaillat, Pascal; Saez, Emmanuel - National Bureau of Economic Research - 2022
Most governments are mandated to maintain their economies at full employment. We propose that the best marker of full employment is the efficient unemployment rate, u*. We define u* as the unemployment rate that minimizes the nonproductive use of labor--both jobseeking and recruiting. The...
Persistent link: https://www.econbiz.de/10013334429
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Chapter 7. Search in Macroeconomic Models of the Labor Market
Rogerson, Richard; Shimer, Robert - In: Handbook of labor economics : volume 4, part A, (pp. 619-700). 2011
This chapter assesses how models with search frictions have shaped our understanding of aggregate labor market outcomes in two contexts: business cycle fluctuations and long-run (trend) changes. We first consolidate data on aggregate labor market outcomes for a large set of OECD countries. We...
Persistent link: https://www.econbiz.de/10014025126
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Chapter 10. Monetary Policy and Unemployment
Galí, Jordi - In: Handbook of monetary economics : volume 3, (pp. 487-546). 2010
Much recent research has focused on the development and analysis of extensions of the New Keynesian framework that model labor market frictions and unemployment explicitly. This chapter describes some of the essential ingredients and properties of those models, and their implications for...
Persistent link: https://www.econbiz.de/10014025670
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Chapter 6. Allocative and Remitted Wages : New Facts and Challenges for Keynesian Models
Basu, S.; House, C.L. - In: Handbook of macroeconomics : volume 2, v. 2A-2B SET, (pp. 297-354). 2016
Modern monetary business-cycle models rely heavily on price and wage rigidity. While there is substantial evidence that prices do not adjust frequently, there is much less evidence on whether wage rigidity is an important feature of real world labor markets. While real average hourly earnings...
Persistent link: https://www.econbiz.de/10014024268
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Unemployment crises
Petrosky-Nadeau, Nicolas; Zhang, Lu - 2014 - Last rev.: July 16, 2014
A search and matching model, when calibrated to the mean and volatility of unemployment in the postwar sample, can potentially explain the unemployment crisis in the Great Depression. The limited responses of wages from credible bargaining to labor market conditions, along with the congestion...
Persistent link: https://www.econbiz.de/10010411443
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Doves for the rich, hawks for the poor? : distributional consequences of monetary policy
Gornemann, Nils; Küster, Keith; Nakajima, Makoto - 2016
We build a New Keynesian business-cycle model with rich household heterogeneity. A central feature is that matching frictions render labor-market risk countercyclical and endogenous to monetary policy. Our main result is that a majority of households prefer substantial stabilization of...
Persistent link: https://www.econbiz.de/10011563007
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The macro-dynamics of sorting between workers and firms
Lise, Jeremy; Robin, Jean-Marc - 2013
We develop an equilibrium model of on-the-job search with ex-ante heterogeneous workers and firms, aggregate uncertainty and vacancy creation. The model produces rich dynamics in which the distributions of unemployed workers, vacancies and worker-firm matches evolve stochastically over time. We...
Persistent link: https://www.econbiz.de/10009785890
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Inflation Strikes Back : The Role of Import Competition and the Labor Market
Amiti, Mary; Heise, Sebastian; Karahan, Fatih; Şahin, … - National Bureau of Economic Research - 2023
U.S. inflation has recently surged, with inflation reaching its highest readings since the early 1980s. We examine the … drivers of this rise in inflation, focusing on supply chain disruptions, labor supply constraints, and their interaction … endogenous markups, we find that supply chain disruptions combined with a rise in the disutility of work raised inflation by …
Persistent link: https://www.econbiz.de/10014287312
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Wage Rigidity and Job Creation
Haefke, Christian; Sonntag, Marcus; van Rens, Thijs - C.E.P.R. Discussion Papers - 2012
Recent research in macroeconomics emphasizes the role of wage rigidity in accounting for the volatility of unemployment fluctuations. We use worker-level data from the CPS to measure the sensitivity of wages of newly hired workers to changes in aggregate labor market conditions. The wage of new...
Persistent link: https://www.econbiz.de/10011084442
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Heterogeneous Downward Nominal Wage Rigidity : Foundations of a Static Wage Phillips Curve
Schmitt-Grohé, Stephanie; Uribe, Martín - National Bureau of Economic Research - 2022
. The model delivers a static wage Phillips curve linking current wage inflation to current unemployment. For standard … stickiness, which features a forward-looking wage Phillips curve, linking current wage inflation to future expected wage … inflation and current unemployment. This result puts in perspective the role played by the forward-looking component of the new …
Persistent link: https://www.econbiz.de/10013477266