"Shimer's calibrated version of the Mortensen-Pissarides model generates unemployment fluctuates much smaller than the … has been challenged by Costain and Reiter, who say it generates unrealistically big differences in unemployment from the …

"We construct a utility-based model of fluctuations, with nominal rigidities and unemployment, and draw its … implications for the unemployment-inflation tradeoff and for the conduct of monetary policy.We proceed in two steps. We first leave … unemployment in the constrained efficient allocation. We then focus on the implications of alternative real wage setting mechanisms …