The purpose of this paper is twofold. First, it reviews the model of search and matching equilibrium and derives the properties of employment and unemployment equilibrium. Second, it applies the model to the study of employment fluctuations and to the explanation of differences in unemployment...

In this paper we model a job-specific shock process in the matching model of unemployment with non-cooperative wage behaviour. We obtain endogenous job creation and job destruction processes and study their properties. We show that an aggregate shock induces negative correlation between job...

We explore the effects of taxes and subsidies on job creation, job destruction, employment, and wages in the Mortensen-Pissarides version of the search and matching equilibrium framework. Qualitative analytical results show that wage and employment subsidies increase employment, especially of...

Dale T. Mortensen and Christopher A. Pissarides are the recipients (with Peter Diamond) of the Nobel memorial Prize in Economics 2010. They have made path-breaking contributions to the analysis of markets with search and matching frictions, which account for much of the success of job search...

Interview with the 2010 Laureates in Economic Sciences Peter A. Diamond, Dale T. Mortensen and Christopher A. Pissarides, 6 December 2010. The interviewer is Adam Smith, Editorial Director of Nobel Media.

The purpose of this chapter is twofold. First, it reviews the model of search and matching equilibrium and derives the properties of employment and unemployment equilibrium. Second, it applies the model to the study of employment fluctuations and to the explanation of differences in unemployment...

Equilibrium models of labor markets characterized by search and recruiting friction and by the need to reallocate workers from time to time across alternative productive activities represent the segment of the research frontier explored in this chapter. In this literature, unemployment spell and...

New technology embodied in capital equipment can be adopted either through destruction of existing jobs and the creation of new ones or by renovation, updating the job's equipment. Under the assumption that the destruction of jobs generates worker layoffs, we show that higher productivity growth...