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During the Great Recession following the recent financial crisis large fiscal stimuli were implemented to counteract labor market sclerosis. We explore the effectiveness of various fiscal packages in a matching model featuring inefficient unemployment and a rich fiscal sector employing...
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paper is threefold: first, we show that the model provides a good fit for employment and unemployment volatility, as well as … volatility of employment and unemployment. Finally, we show the role of search costs in shaping those results. -- matching …
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