higher wages. This increases firms' incentives to post more vacancies, which makes unemployment volatile and sensitive to … aggregate shocks. The model is robust to two major criticisms of existing theories of sluggish wages and volatile unemployment … explains 70% of unemployment volatility …

In recessions, unemployment increases despite the--perhaps counterintuitive--fact that the number of unemployed workers … finding jobs expands. We propose a theory of unemployment fluctuations resting on this countercyclicality of gross flows from … unemployment into employment. In recessions, the abundance of new hires "congests" the jobs the unemployed fill--diminishing their …

unemployment benefits …

unemployment depends positively on the drift coefficients and negatively on the volatility coefficients of both price and … relation of inflation and productivity with unemployment at low frequencies. Long-run unemployment is negatively correlated …