This paper studies the relationship between the change in the unemployment rate and output growth using an approach based on labor market flows. The framework shows why the Okun coefficient may be constant/time-varying and/or symmetric/asymmetric and that the outcome lies with the behavior of...

In the past decades several features of U.S. unemployment dynamics have been investigated empirically. The original focus of research was on the duration of unemployment. In later studies the cyclicality of incidence and duration, compositional effects and duration dependence of the exit rate...

This paper first documents the increase in the time lag with which labor input reacts to output fluctuations (the labor adjustment lag) that is visible in US data since the mid-1980s. We show that a lagged labor adjustment response is optimal in a setting where there is uncertainty about the...

This paper show analytically that introducing diminishing returns to labor at the firm level into the Diamond-Mortensen-Pissarides model, followed by recalibration, does not change aggregate dynamics of unemployment and vacancies. This invariance result holds for several standard calibration...

The COVID-19 crisis may have widely and permanently altered the labor market through the demand for skills. Crises tend to accelerate technological change. Previous recent crises were characterized by an acceleration of automation, which generally led to a decrease in middle-income jobs with...

Cost-of-Living-Adjustment (COLA) coverage figures suggest a time variation in the degree of wage indexation. In spite of this observation, most current literature conveniently assume a constant degree of indexation as this variable is not directly observable. This study intends to empirically...

(Spatial) panel data are routinely modelled in discrete time (DT). However, there are compelling arguments for continuous time (CT) modelling of (spatial) panel data. Particularly, most social processes evolve in CT, so that statistical analysis in DT is an oversimplification, gives an...

The U.S. unemployment rate has remained stubbornly high since the 2007-2009 recessionleading many to conclude that structural, rather than cyclical, factors are to blame. Relying on astandard job search and matching framework and empirical evidence from a wide array of labormarket indicators, we...

Using data from the Current Population Survey from 1980 through 2010 we examine what drives variation andcyclicality in the growth rate of real wages over time. We employ a novel decomposition technique that allowsus to divide the time series for median weekly earnings growth into the part...

When workers send applications to vacancies they create a network. Frictionsarise because workers typically do not know where other workers apply to and firmsdo not know which candidates other firms consider. The first coordination frictionaffects network formation, while the second coordination...