In this paper we incorporate a labor market with matching frictions and wage rigidities into the New Keynesian business …

In this paper we incorporate a labor market with matching frictions and wage …

dynamics through both their effect on marginal cost and on price-setting behavior. In a search and matching environment, we …

.ation dynamics through both their effect on marginal cost and on price-setting behaviour. In a search and matching environment, we …

dynamics through both their effect on marginal cost and on price-setting behavior. In a search and matching environment, we …

dynamics through both their effect on marginal cost and on price-setting behavior. In a search and matching environment, we …

dynamics through both their effect on marginal cost and on price-setting behaviour. In a search and matching environment, we …

In this paper we incorporate a labor market with matching frictions and wage rigidities into the New Keynesian business … ; matching models ; labor market search ; inflation persistence ; real wage rigidity …

-Mortensen-Pissarides (DMP) search and matching model. Ex-ante heterogeneity and sorting have important implications for the dynamic properties … market. Additionally, endogenous matching sets fluctuate in response to shocks and amplify job-creation. Using a standard …, the firms' matching sets are wider in equilibrium than the workers' matching sets and fluctuate more in response to shocks. …

We estimate a New Keynesian model with matching frictions and nominal wage rigidities on UK data. We are able to … study the transmission mechanism. With matching frictions, wage rigidities have limited effect on inflation dynamics …, despite improving the empirical performance of the model. The reason is that with matching frictions, marginal costs depend on …