We analyze the general equilibrium effects of countercyclical unemployment benefit policies. Our heterogenous …-agent model features costly job search with imperfect insurance of unemployment risk and individual savings. Our model predicts …: (1) the additional unemployment under a countercyclical policy relative to that under an acyclical policy to be a …

temporarily reduce unemployment and increase wages in periphery countries at the cost of somewhat higher unemployment in receiving …

bottom-line of the paper is that product market reforms will help to reduce aggregate unemployment under many circumstances … even though sectoral unemployment may increase. We also highlight that the mobility of high-skilled workers and the … distribution of unemployment across sectors determine whether productivity improvements in one sector affect aggregate unemployment …

unemployment decreases upon offshoring in the presence of perfect intersectoral labor mobility. If, as a result, labor moves to the … sector with the lower (or equal) vacancy costs, there is an unambiguous decrease in economywide unemployment. With imperfect … intersectoral labor mobility, unemployment in the offshoring sector can rise, with an unambiguous unemployment reduction in the non …