This paper aims at explaining the dynamics of labor markets in Spain, especially the high persistence of unemployment and the Beveridge curve. We build a stochastic dynamic general equilibrium matching model, which assumes failures in the matching between vacancies and unemployed. We calibrate...

This paper aims at explaining the dynamics of the Spanish labour market, focussing in particular on the high persistence of unemployment and the dynamics around the Beveridge curve. We develop a stochastic dynamic general equilibrium model in which we assume that the labour market may be...