Galí, Jordi; Rens, Thijs van - Barcelona Graduate School of Economics (Barcelona GSE) - 2014
, (ii) the relative volatility of employment rose, and (iii) the relative (and absolute) volatility of the real wage rose …, which reduced hiring frictions. We develop a simple model with hiring frictions, variable effort, and endogenous wage … contributed to the observed decline in output volatility. …