LUTGEN, Vanessa; LINDEN, Bruno VAN DER - Institut de Recherche Économique et Sociale (IRES), … - 2013
This paper studies equilibrium unemployment in a two-region economy where homogeneous workers and jobs are free to move … expected, increasing matching effectiveness in the other region yields growing regional unemployment rates. We characterize the …, the regional unemployment rates are much lower than in the decentralized economy and nobody searches in the other region. …