It is common knowledge that the standard New Keynesian model is not able to generate a persistent response in output to temporary monetary shocks. We show that this shortcoming can be remedied in a simple and intuitively appealing way through the introduction of labor turnover costs (such as...

It is common knowledge that the standard New Keynesian model is not able to generate a persistent response in output to temporary monetary shocks. We show that this shortcoming can be remedied in a simple and intuitively appealing way through the introduction of labor turnover costs (such as...

This paper surveys the use of search and matching models in macroeconomics. It outlines the standard model, discusses its extensions, presents alternative formulations, considers the empirical evidence, and studies applications to macroeconomic questions such as business cycles, growth, and...

By using the U.S. NBER-CES industry-level data for the 1962-2005 period, we analyze how exogenous changes in firms' borrowing costs, measured by the spread between Baa and Aaa rated corporate bonds, affect employment dynamics and whether external finance dependence differences across industries...

Based on a model with imperfectly competitive labor and product markets the real consequences of labor market shocks for economies with either an earnings-related or flatrate unemployment compensation system are considered. A distinctive feature of the analysis is the comparison of both...

This paper proposes a theoretical and quantitative analysis of the reallocation of labor across firms in response to idiosyncratic shocks of different persistence. Creating and destroying jobs is costly and workers are paid a share of the value of the marginal worker. The model predicts that...

We construct a time-varying network of labor competitors for all U.S. public companies. We show the importance of this network for transmitting labor and industry shocks. There are three main findings. First, the overlap between firms' labor competitors and product market rivals is less than 20...

This study investigates the effect of a negative demand shock on the composition of worker types at firms and examines the change in the share of temporary agency workers. The 2007-2009 global financial crisis is used as the natural experiment to clearly identify the causal link between the...

We analyze monetary policy in a model where temporary shocks can permanently scar the economy's productive capacity. Unemployed workers' skill losses generate multiple steady-state unemployment rates. When monetary policy is constrained by the zero bound, large shocks reduce hiring to a point...

This study uses input-output labor-accounting to estimate the impact of rising imports from China on US employment. Our counterfactual analysis incorporates offsets from substitution for imports from other countries, increased US exports to China and other countries, and job gains in downstream...