In search of a macroeconomic theory of wage determination, the agnostic reader should be puzzled by the apparent … contradiction between two influential theories. On one hand, in the standard search-matching theory with wage bargaining, hiring … cost and constant returns of labor, the bargaining power of employees allows them to get rents and gives rise either to …

Labor market frictions are not the only possible factor responsible for high unemployment. Credit market imperfections …. This paper shows that labor and credit market imperfections interact in a complementary way - which may explain why … European and US unemployment differ so much when labor markets have become more similar at the margin in Europe and the US. To …

labor frictions. Under standard assumptions, theory always implies a motononic negative link between capital-labor ratios …Employment protection (EPL) has a well known negative impact on labor flows as well as an ambiguous but often negative … effect on employment. In contrast, its impact on capital accumulation and capital-labor ratio is less well understood. The …

labor market states. In steady-state, we hence have a theory of equilibrium unemployment determined by both matching … labor force and rises the share of attached workers. Finally, our theory suggests that contrary to two-state models … frictions and labor market participation margins. The paper firstly rationalizes and quantitatively accounts for the existence …

differences in labor mobility and reallocation costs, which are typically ignored in American "International Trade" textbooks … human capital investments: they are not independent of the aggregate state of labor markets, and in particular, frictions … and slackness of the labor market raises the returns to specific human capital investments relative to general capital …