This paper points out an empirical failing of real business cycle models in which unemployment is endogenized through a … matching function. One can easily choose a calibration to make the cyclical fluctuation in unemployment as large in the model … as it is in the data, or to make the response of unemployment to a change in the unemployment benefit as small in the …

The unemployment rate in Germany after reaching a peak of 12.1% in 2005 began to decline steadily, and the improvement …