This paper studies the role of labor market institutions in business cycle fluctuations. We develop a DSGE model with … search and matching frictions and incorporate a US unemployment insurance experience rating system. Layoff taxes based on … experience rating finance the cost of unemployment benefits and create considerable employment adjustment costs. Our framework …

We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms …. Countries may differ with respect to size, geographical location, and labor market institutions. Contrary to the literature, our … single-sector perspective pays special attention to the role of income effects and shows that bad institutions in one country …

-over effects of labor market institutions ; unemployment ; international trade ; search frictions ; heterogeneous firms …We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms …. Countries may differ with respect to size, geographical location, and labor market institutions. Contrary to the literature, our …