We consider the canonical directed search framework in which sellers play pure strategies and assume that buyers play strategies that are monotone in prices, can remain inactive and choose to do so whenever their payoff from participating is zero regardless of what the other buyers do. We show...

We examine the implications of worker heterogeneity on the equilibrium matching process, using a directed search model. Worker abilities are selected from a general distribution, subject to some weak regularity requirements, and the firms direct their job offers to workers. We identify...

We examine the relationship between inflation and unemployment in the long run,using quarterly US data from 1952 to 2010. Using a band-pass filter approach, we find strong evidence that a positive relationship exists, where inflation leads unemployment by some 3 to 3.5 years, in cycles that last...

In recent years a large theoretical and empirical literature has emerged on hysteresis in unemployment. This paper reviews the theoretical part of this literature, including the various insider-outsider models that have been advanced to explain hysteresis. The review finds that while the...

In this paper we deal with five related questions. What are the 'stylised facts'about the behaviour of flows into and out of unemployment and the Unemployment Rate in Australia, especially in recessions? Why does the number of persons flowing out of Unemployment (including the number flowing...

We consider the contribution of sectoral shocks to post-war US unemployment movements in a dynamic factor framework. Whereas previously published estimates of the contribution of sectoral shocks to unemployment relate to a particular theory of unemployment, our approach is sufficiently general...

Inflation targeting needs to be supplemented by an economic growth target so that central banks will not adopt monetary policy which results in stagnation. There is no guarantee that the economy will move towards full employment by itself when the inflation rate is kept between two to three per...

In this paper we develop a framework which is appropriate for the systematic investigation of the relationship between net (and gross) flows between different labour market states and movements in the unemployment rate. We use that framework to investigate the behaviour of net flows of persons...

In this paper we look at the way in which the ABS derives gross flows data from successive Labour Force Surveys. The procedure used by the ABS is described and a measure of the 'matching rate' obtained. We develop a simple theoretical model designed to explore the relationship between the Labour...