In this paper we present a large scale computable general equilibrium model derived from GEM-E3 model for European Union with three geographical areas and 18 different sectors. We do simulations with GAMS-PATH software algorithm which is based on mix complementarity (FOC and shadow prices). This...

This paper studies the conditions under which new equipment may endogenously occur. To this end, we construct an endogenous growth multisectoral model with a preeminent new equipment sector. Technological progress is embodied: New machines can only be run on the most recent generations of...

Existing models of equilibrium unemployment with endogenous labor market participation are complex, generate procyclical unemployment rates, and suffer from the usual defects of matching models. We embed endogenous participation in a simple, tractable job market matching model, show analytically...

n this paper we develop the Generalize Taylor Economy (GTE) in which there are many sectors with overlapping contracts of different lengths. We are able to show that even in economies with the same average contract length, monetary shocks will be more persistent when there are longer contracts....

There is now considerable evidence that business cycle variation in output and employment in the U.S. differs in expansions and contractions. We present nonparametric evidence that asymmetries are strongest in durable goods manufacturing. In a Markov switching framework, we find two leading...

We quantitatively assess the role of on-the-job search for labor market dynamics in a fully specified, real DSGE model with endogenous job creation and destruction. The model features heterogeneity of the productivity of firms, across which workers search, as well as heterogeneity of jobs within...

This paper considers a dynamic matching model with imperfectly observable worker effort as in Shapiro and Stiglitz (1994). In our economy the no-shirking condition endogenously imposes real wage rigidity on the matching market. This generates "contractual fragility" and inefficient separations...