and Facts The basic model: the consumption/saving choice Allowing for a labor/leisure choice (the RBC model) Allowing for …

and Facts; The basic model: the consumption/saving choice; Allowing for a labor/leisure choice (the RBC model); Allowing …

We develop a utility based model of fluctuations, with nominal rigidities, and unemployment. In doing so, we combine …-Mortensen-Pissarides model, with its focus on labor market frictions and unemployment. In developing this model, we proceed in two steps. We … effect on unemployment in the constrained efficient allocation. We then focus on the implications of alternative real wage …