We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage … cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first … cyclicality from bargaining dampens unemployment dynamics through the standard mechanism. Third, our calibrated model suggests 46 …

employment is the efficient unemployment rate, u*. We define u* as the unemployment rate that minimizes the nonproductive use of …). Accordingly, the efficient unemployment rate is the geometric average of the unemployment and vacancy rates: u* = √uv. We compute …

also a downward rigid wage for new hires. The downward rigidity in the hiring wage magnifies the response of unemployment …

We show that the largest increase in unemployment benefits in U.S. history had large spending impacts and small job …

Unemployment arises from frictions in the matching of job-seekers and employers. The level of resources that employers … devote to evaluating applicants for jobs is a key factor in the magnitude of the frictions. Unemployment will be low if …-selection by job-seekers, so that they apply mainly for jobs where they are qualified, friction and thus unemployment will be low …

How has the internet affected search and hiring, and what are the implications for aggregate unemployment? Answering … indicate that the steady-state unemployment rate fell by as much as 14% due to the broadband internet expansion …

, that frictions (sand-in-the-wheels) may decrease unemployment and that the equilibrium is determined by two simple …

analyze data from the SIPP and find that the wages for new hires coming from unemployment are no more cyclical than those of …

interpretation for the dynamic inflation--unemployment relation found in the data …