The labor market by itself can create cyclical outcomes, even in the absence of exogenous shocks. We propose a theory that shows that the search behavior of the employed has profound aggregate implications for the unemployed. There is a strategic complementarity between active on-the-job search...

There has been a substantial body of work modeling the co-movement of employment, vacancies, and output over the business cycle. This paper builds on this literature, and informed by empirical investigation, models worker and firm search and hiring behavior in a manner consistent with recent...

Okun's law is formulated as the ratio between GDP and unemployment (UE): β = f(GDP/UE). It is used to investigate the relations between output and labor input across regions or across business cycles. Based on results by James D. Hamilton we replaced the United States UE with employment (EM)...