We recalibrate den Haan, Haefke, and Ramey's matching model to incorporate our preferred specification of "turbulence" as causing distinct dynamics of human capital after voluntary and involuntary job losses. Under our calibration, with high unemployment benefits, an increase in turbulence...

Post World War II European welfare states experienced several decades of relatively low unemployment, followed by a plague of persistently high unemployment since the 1980s. We impute the higher unemployment to welfare states' diminished ability to cope with more turbulent economic times, such...

A dispute about the size of the aggregate labor supply elasticity has been fortified by a contentious aggregation theory used by real business cycle theorists. The replacement of that aggregation theory with one more congenial to microeconomic observations opens possibilities for an accord about...

To understand trans-Atlantic employment experiences in the post-World War II era, we enrich the environment of Ljungqvist and Sargent (2008) in ways that allow skill losses occasioned by involuntary job separations (`turbulence') to have further effects on labor market outcomes. Our model...

A general equilibrium search model makes layoff costs affect the aggregate unemployment rate in ways that depend on equilibrium proportions of frictional and structural unemployment that in turn depend on the generosity of government unemployment benefits and skill losses among newly displaced...