Abbritti, Mirko; Boitani, Andrea; Damiani, Mirella - Dipartimenti e Istituti di Scienze Economiche, … - 2008
The dynamic general equilibrium model with hiring costs presented in this paper delivers involuntary unemployment in the steady state as well as involuntary fluctuations in unemployment. The existence of hiring friction introduces externalities that, in turn, entail the breakdown of the "divine...