We develop a tractable macroeconomic model with employment risk and labor market search in order evaluate the effects of labor market reform on unemployment, growth, and welfare. The model has a large number of risk-averse households who can invest in risk-free physical capital and risky human...

Introduction -- Real Business Cycle (RBC) model -- Basic New-Keynesian (NK) model -- New-Keynesian model with wage stickiness -- New-Keynesian model with habit formation and non-Ricardian agents -- New-Keynesian Model with adjustment costs on investment and under-utilization of maximum installed...