The subject of our next article, "The Taylor Curve and the Unemployment-Inflation Tradeoff," by Satyajit Chatterjee, is finding an optimal monetary policy menu. In the past, monetary policy options were described in terms of a tradeoff between the unemployment rate and the inflation rate, the...

The potential benefit of policies that eliminate a small likelihood of economic crises is calculated. An economic crisis is defined as an increase in unemployment of the magnitude observed during the Great Depression. For the U.S., the maximum-likelihood estimate of entering a depression is...

The potential benefit of policies that eliminate a small likelihood of economic crises is calculated. An economic crisis is defined as an increase in unemployment of the magnitude observed during the Great Depression. For the U.S., the maximum-likelihood estimate of entering a depression is...

This paper estimates an identified VAR on US data to gauge the dynamic response of the job finding rate, the worker separation rate, and vacancies to monetary policy shocks. I develop a general equilibrium model that can account for the large and persistent responses of vacancies, the job...

This paper extends Shimer's (2005) Mismatch model to allow for endogenous mobility. Rather than work directly in the original model, I use a related framework, the stock-flow matching model (Taylor, 1995; Coles and Muthoo, 1998). One of the contributions of this paper is therefore to compare the...

Shimer (2005) showed that a standard search and matching model of the labor market fails to generate fluctuations of unemployment and vacancies of the magnitude observed in US data in response to shocks to average labor productivity of plausible magnitude. He also suggested that wage...