unemployment (moving to a new labor market or waiting for labor market conditions to improve) and inactivity (enjoying leisure …This paper extends Lucas and Prescott's (1974) search model to develop a notion of rest unemployment. The economy … evaluate the model. Quantitatively, we find that in the U.S. economy many more people may be in rest unemployment than in …

probability that an unemployed worker finds a job, the ins and outs of unemployment. Since 1948, the job finding probability has … accounted for three-quarters of the fluctuations in the unemployment rate in the United States and the employment exit …

This paper studies the optimal timing of unemployment insurance subsidies in a McCall search model. Risk-averse workers … sequentially sample random job opportunities. Our model distinguishes unemployment subsidies from consumption during unemployment … stationary search problems, the optimal subsidies are independent of unemployment duration. In contrast, when workers are …

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 …

-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 …

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 …