with search and matching frictions. The size of the public sector has been generally expanding over the last decade …, unemployment rate and market tightness as well as on the overall economic growth. We aim at determining whether a portion of … unemployment can be explained by either the increased public hiring or shrinking of the number of public employees in the last …

Ljungqvist and Sargent (2017) (LS) show that unemployment fluctuations can be understood in terms of a quantity they … understanding unemployment fluctuations. We show how the LS framework can be adapted to incorporate risk premia. We derive an … show how to use properties of the artificial economy to deduce how risk premia affect unemployment dynamics in the original …

successfully contributed to the decline of the unemployment rate, critics claim that the reforms led to wage restraint and …