Worker flows to and from unemployment simultaneously occur over the U.S. business cycle, and the size of the flows is positively linked to the unemployment rate. Unemployment flows and the unemployment rate are highly volatile, persistent and countercyclical. Inflows lead the unemployment rate,...

Many aggregate statistics on an average real wage exhibit a composition bias. This bias arises because the composition of workers and jobs systematically changes over the business cycle. The one-sector stochastic growth model is augmented by matching frictions in the labor market and...