This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are … quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the … matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important …

This paper surveys recent work in equilibrium models of labor markets characterized by search and recruitment frictions …

both the vacancy-unemployment ratio and employment. We show that the standard version of the Mortensen-Pissarides matching … the matching model with sunk costs, new job openings react sluggishly to shocks, leading to highly realistic dynamics …

This paper develops a matching model of the labour market under wage rigidity when hiring decisions are irreversible …

frictions and unemployment insurance, when the latter is only imperfectly related to search effort. A balanced social insurance … volatility and persistence of vacancies and unemployment. …

We use an estimated monetary business cycle model with search and matching frictions in the labor market and nominal … movements in GDP, unemployment, vacancies, and wages in the period from 2007 until 2011. We show that contractionary financial … factors and reduced efficiency in labor market matching were largely responsible for the experience in the U.S. Financial …