This paper illustrates why fiscal policy becomes more effective as unemployment rises in recessions. The theory is … based on the equilibrium unemployment model of Michaillat (forthcoming), in which jobs are rationed in recessions. Fiscal …; therefore fiscal policy reduces unemployment effectively. Formally the fiscal multiplier—the reduction in unemployment rate …

. The Beveridge curve depicts the steady state of the model, whereby inflows into unemployment are equal to the outflows …

This paper models unemployment as the result of matching frictions and job rationing. Job rationing is a shortage of … returns to labor. During recessions, job rationing is acute, driving the rise in unemployment, whereas matching frictions … contribute little to unemployment. Intuitively, in recessions jobs are lacking, the labor market is slack, recruiting is easy and …

This article is based on a paper that models unemployment as the result of matching frictions and job rationing. Job … diminishing marginal returns to labor. During recessions, job rationing is acute, driving the rise in unemployment, whereas … matching frictions contribute little to unemployment. Intuitively, in recessions jobs are lacking, the labor market is slack …

unemployment and a positively-sloped Beveridge curve. This paper presents a calibrated model which succeeds at generating … countercyclical unemployment and a negatively-sloped Beveridge curve despite the presence of a participation margin. …

, selective survey of the literature. Four fundamental questions are explored: how are unemployment, job vacancies, and employment …

I examine the dynamic evolutions of unemployment, hours of work and the service share since the war in the United … that the very low unemployment in Europe in the 1960s was due to the high productivity growth associated with technological …

allowing on-the-job search. We obtain that the elasticity of unemployment with respect to growth shrinks from 1.63 to 0 … search process than the unemployed. Thus, we show that, rather than contributing to unemployment, creative destruction …

This paper tests whether aggregate matching is consistent with unemployment being mainly due to search frictions or due … with reference to the design of optimal unemployment insurance programs. …