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 … employment alongside inflation. -- Optimal monetary policy ; hiring and firing costs ; labor market frictions ; policy trade-off …

macroeconomic volatilities. In our subsequent empirical estimations, we find that higher labor turnover costs have a statistically …

This paper explores the influence of on-the-job training on the employment effect of firing costs. It shows that on …-the-job training (generating firm specific skills) causes firing costs to have a contractionary influence on average employment (over …

introduction of labor turnover costs (such as hiring and firing costs). Assuming that it is costly to hire and fire workers implies …