-cycle-frequency fluctuations in unemployment and job vacancies in response to shocks of a plausible magnitude. In the U.S., the vacancy-unemployment … vacancy-unemployment ratio and labor productivity have nearly the same variance. I establish this claim both using analytical … small movement along a downward sloping Beveridge curve (unemployment-vacancy locus). A shock to the job destruction rate …

welfare. This insight leads to a novel test for the optimality of unemployment insurance based on the responsiveness of … reservation wages to unemployment benefits. Some existing estimates imply significant gains to raising the current level of … unemployment benefits in the United States, but highlight the need for more research on the determinants of reservation wages. Our …

We study the optimal design of unemployment insurance for workers sampling job opportunities over time. We focus on the … absolute risk aversion preferences, a very simple policy is optimal: a constant benefit during unemployment, a constant tax … liquidity to smooth their consumption; and providing unemployment subsidies that serve as insurance against the uncertain …

The standard theory of equilibrium unemployment, the Mortensen-Pissarides search and matching model, cannot explain the … magnitude of the business cycle fluctuations in two of its central elements, unemployment and vacancies. Modifying the model to … make the present value of wages unresponsive to current labor market conditions amplifies fluctuations in unemployment and …

This paper accounts for the observed increase in unemployment duration relative to the unemployment rate in the U ….S. over the past thirty years, typified by the record low level of short-term unemployment. We show that part of the increase … remaining increase in unemployment duration relative to the unemployment rate is concentrated among women, whose unemployment …