I introduce risk-averse preferences, labor-leisure choice, capital, individual productivity shocks, and market incompleteness to the standard Mortensen-Pissarides model of search and matching and explore the model's cyclical properties. There are four main findings. First and foremost, the...

This paper argues that a broad class of search models cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies in response to shocks of a plausible magnitude. In the U.S., the vacancy-unemployment ratio is 20 times as volatile as average labor...

On the one hand, in expansions it is relatively easier for workers to find jobs, so they rely less strongly on their social networks, which means that hiring through referrals should be less frequent in expansions. On the other hand, firms have difficulties to fill their open positions in...