Hassler, John; Mora, Rodríguez; Vicente, José; … - C.E.P.R. Discussion Papers - 1999
In this paper, we incorporate a positive theory of unemployment insurance into a dynamic overlapping generations model … unemployment insurance levels in a politico-economic equilibrium. The interaction between the political decision about the level of … the unemployment insurance and the optimal search behavior of the unemployed gives rise to a self-reinforcing mechanism …