We examine product market regulation as an explanation for divergent US and continental European labor market performance. First, we show that the choice of bargaining regime is crucial for the effect of product market competition on unemployment rates, being substantial under collective and...

Recent empirical findings have emphasized post entry growth of survivors, as opposed to exit of inefficient and small firms, as the main source of growth over time in the average size of a cohort of entering firms. One proposed explanation for the post entry growth of survivors is financing...

I reconcile macro- and micro-evidence on price-setting in a search and matching framework. Negotiation of wages substantially increases strategic complementarity of price-setting and thus real price rigidities which reduces implied price durations. This mechanism also dampens wage responses to...

Shimer (2005) showed that a standard search and matching model of the labor market fails to generate fluctuations of unemployment and vacancies of the magnitude observed in US data in response to shocks to average labor productivity of plausible magnitude. He also suggested that wage...

A matching model with labor/leisure choice and staggered bargaining is used to explain (i)differences in GDP per hour and GDP per capita, (ii) differences in employment, (iii) differences in the proportion of part-time work across countries. The model predicts that the higher the level of...

Economies respond differently to aggregate shocks that reduce output. While some countries rapidly recover their pre-crisis trend, others stagnate. Recent studies provide empirical support for a connection between aggregate growth and plant dynamics through their effect on productivity: the...

This appendix provides a detailed exposition of the computational method applied to the model of Campbell (1997). Heterogeneity in the production sector of that model implies that its prices and quantities are contnuous functions on the real line rather than scalars. The computational method...

At low inflation rates, the main motivation for price changes is idiosyncratic shocks to firms and industries. In standard models of sticky prices, the existence of these idiosyncratic shocks makes prices more flexible and hence monetary policy less powerful to affect real variables (and less...