Abstract The paper is based on a synthesis of a "product variety" version of the firm life cycle model developed by Klette and Kortum (2004) and an equilibrium search model of the labor market with job to job flows introduced by Mortensen (2003). In the construction, a continuum of intermediate...

This paper considers a labor market employers differ in productivity, which is private information, and face hiring costs. Each employer sets its current wage but does not commit to future wages. Workers search on the job for better paid employment. A signalling equilibrium is show to exist and...

There are two facts about the world that we take as given: First the "law of one price" is false -- one can find many different prices for what appears to be, beyond reasonable doubt, the same good. Second, prices are set in nominal terms and appear, beyond reasonable doubt, to be sticky -- some...