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Hall, Robert E. - 2021

Fluctuations in the equilibrium rate of unemployment can only be understood within a theory of the natural or … in exchange for immediate employment. The task of the theory is to explain why any unemployment remains at all when these … conditions are satisfied. Part of this problem has been studied in detail in the "search theory" of unemployment -- once a worker …

Persistent link: https://www.econbiz.de/10013247212

The Flow Approach to Labor Markets

Blanchard, Olivier - 2007

The quot;flow approachquot; to labor markets builds up from the flows of workers and of jobs. It is based on three essential components, a specification of labor demand in terms of flows of job creation/destruction, a process of matching between workers and firms, and a process of wage...

Persistent link: https://www.econbiz.de/10012777110

Minimally Altruistic Wages and Unemployment in a Matching Model

Rotemberg, Julio - 2010

This paper presents a model in which firms recruit both unemployed and employed workers by posting vacancies. Firms act monopsonistically and set wages to retain their existing workers as well as to attract new ones. The model differs from Burdett and Mortensen (1998) in that its assumptions...

Persistent link: https://www.econbiz.de/10012759577

Solving the Dmp Model Accurately

Petrosky-Nadeau, Nicolas - 2013

An accurate global algorithm is critical for quantifying the dynamics of the Diamond-Mortensen-Pissarides model. Loglinearization understates the mean and volatility of unemployment, overstates the unemployment-vacancy correlation, and ignores impulse responses that are an order of magnitude...

Persistent link: https://www.econbiz.de/10013079210

Ranking, Unemployment Duration, and Wages

Blanchard, Olivier; Diamond, Peter A. - 2021

Firms often receive multiple acceptable applications for vacancies, requiring a choice among candidates. This paper contrasts equilibria when firms select workers at random and when firms select the worker with the shortest spell of unemployment, called ranking. With the filling of vacancies...

Persistent link: https://www.econbiz.de/10013210544

A Signaling Theory of Unemployment

Ma, Ching-to Albert; Weiss, Andrew M. - 2021

This paper presents a signaling explanation for unemployment. The basic idea is that employment at an unskilled job may be regarded as a bad signal. Therefore, good workers who are more likely to qualify for employment at a skilled job in the future are better off being unemployed than accepting...

Persistent link: https://www.econbiz.de/10013210624

Friedman and Phelps on the Phillips Curve Viewed from a Half Century's Perspective

Gordon, Robert J. - 2018

In the late 1960s the stable negatively sloped Phillips Curve (PC) was overturned by the Friedman-Phelps natural rate model. Their PC was vertical in the long run at the natural unemployment rate, and their short-run curve shifted up whenever unemployment was pushed below the natural rate. This...

Persistent link: https://www.econbiz.de/10012913361

U.S. Inflation, Labor'S Share, and the Natural Rate of Unemployment

Gordon, Robert J. - 2021

The Phillips curve was init-ally formulated as a relationship between the rate of change and unemployment, yet what matters for stabilization policy is the rate of inflation, not the rate of wage change. This paper provides new estimates of Phillips curves for both prices and wages extending...

Persistent link: https://www.econbiz.de/10013218329

Employment Efficiency and Sticky Wages : Evidence from Flows in the Labor Market

Hall, Robert E. - 2021

I consider three views of the labor market. In the first, wages are flexible and employment follows the principle of bilateral efficiency. Workers never lose their jobs because of sticky wages. In the second view, wages are sticky and inefficient layoffs do occur. In the third, wages are also...

Persistent link: https://www.econbiz.de/10013218535

Workers' Trust Funds and the Logic of Wage Profiles

Akerlof, George A.; Katz, Lawrence F. - 2021

This paper defines a concept, a worker's trust fund, which is useful in analyzing optimal age-earnings profiles. The trust fund represents what a worker loses if dismissed from a job for shirking. In considering whether to work or shirk, a worker weighs the potential loss due to forfeiture of...

Persistent link: https://www.econbiz.de/10013222990