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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/10012459455

Minimally Altruistic Wages and Unemployment in a Matching Model

Rotemberg, Julio J. - 2008

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/10012464892

The Flow Approach to Labor Markets

Blanchard, Olivier Jean - 1992

The "flow approach" 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 determination...

Persistent link: https://www.econbiz.de/10012474980

A Signaling Theory of Unemployment

Ma, Ching-to Albert - 1990

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/10012475481

Ranking, Unemployment Duration, and Wages

Blanchard, Olivier Jean - 1990

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/10012475646

Fluctuation in Equilibrium Unemployment

Hall, Robert E. - 1977

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/10012478911

The Active Role of the Natural Rate of Unemployment during Cyclical Recoveries

Hall, Robert E.; Kudlyak, Marianna - National Bureau of Economic Research - 2023

We propose that the natural rate of unemployment has an active role in the business cycle, in contrast to the prevailing view that the rate is essentially constant. We demonstrate that this tendency to treat the natural rate as near-constant would explain the surprisingly low slope of the...

Persistent link: https://www.econbiz.de/10014436979

The Thick Market Effect on Local Unemployment Rate Fluctuations

Gan, Li - 2005

This paper studies how the thick market effect influences local unemployment rate fluctuations. The paper presents a model to demonstrate that the average matching quality improves as the number of workers and firms increases. Unemployed workers accumulate in a city until the local labor market...

Persistent link: https://www.econbiz.de/10012467437

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

Hall, Robert E. - 2005

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/10012467502

The Natural Rate Hypothesis : An idea past its sell-by date

Farmer, Roger E.A. - 2013

Central banks throughout the world predict inflation with new-Keynesian models where, after a shock, the unemployment rate returns to its so called "natural rate'. That assumption is called the Natural Rate Hypothesis (NRH). This paper reviews a body of work, published over the last decade,...

Persistent link: https://www.econbiz.de/10012459393