We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms …

It has been noted that the search and matching model cannot account for the observed unemployment fluctuations. Gertler …

downward rigidity, and magnifying the response of unemployment to negative shocks. We also consider layoffs and show that for a …

, causing both unemployment and excessive value added in exports. Moreover, excessive wages induce too much outsourcing of …

This paper studies the unemployment accelerator, a mechanism where workers directly affect the firms' financial … conditions, and, in turn, firms' financial conditions feedback again to the real economy. The unemployment accelerator builds on … in labor and financial markets. We provide compelling micro-evidence of the unemployment accelerator: a 10% increase in a …

. Furthermore, they fail to allow for quantity rationing and to model unemployment as a catastrophic event. The macroeconomics based …