's labor turnover costs (e.g. costs of hiring, training, and firing). In this context, labor turnover costs not only influence …

We study the design of optimal monetary policy in a New Keynesian model with labor turnover costs in which wages are … zero and the optimal volatility of inflation is an increasing function of firing costs. The optimal rule should react to …

and the trend rate of productivity growth is small, a rise in firing costs affects mainly the hiring decision. Thus there … growth is large, firing costs affect mainly the firing decision. Then, as a result, average employment is increased. Our …

predicted in Bayesian equilibrium - costs that are positively correlated lead to steeper supply functions and less competitive … outcomes than do uncorrelated costs. We find that the majority of subjects bid in accordance with the equilibrium prediction … when the environment is simple (uncorrelated costs treatment) but fail to do so in a more complex environment (positively …