between the three core labor force states, employment, unemployment, and inactivity. The dynamics of these transitions depend …The aggregate average unemployment rate in a given country is essentially the result of individual workers' transitions … factors to translate unobserved shocks to the labor market into observed cellspecific unemployment rates as well as bilateral …

Standard macroeconomic models underpredict the volatility of unemployment fluctuations. A common solution is to assume … jobs. This form of wage rigidity does not affect job creation and thus cannot explain the unemployment volatility puzzle …