frictions characterized by employment loss and employment opportunity arrival shocks. We argue that it is able to account for … shocks play a key role in allowing the model to match the persistence of the employment and out of the labor force states …

idiosyncratic employment shocks against which they cannot insure directly. The labor market has a Diamond …We use the model to evaluate a tax-financed unemployment insurance scheme. Higher insurance is beneficial for … consumption smoothing, but because it raises workers' outside option value, it discourages firm entry. We find that the latter …

employment and unemployment. We use a model that features both frictions and an operative labor supply margin to examine the … robustness of this feature to the inclusion of a empirically reasonable labor supply channel. The response of unemployment to … effects of frictions on steady state employment relative to the simplest matching model, and two common extensions. We also …

forces and labor market frictions. Our model matches key features of the cyclical properties of employment, unemployment, and … traditional RBC literature, which emphasized how employment fluctuations arise as a consequence of labor supply responses to price …