implications of how the sticky wages enter into the hiring decision, and there seems to be a tradeoff between generating business … cycle volatility and matching the lack of a long-run relationship between vacancy creation and inflation. With regard to …

process and labor markets are characterized by search and matching frictions. Entrants post vacancies and are matched to idle … cross-correlations of both shares and the higher volatility of the share of profits. Regarding propagation and amplification …, the model matches the persistence of vacancy creation and two-thirds of the observed volatility of market tightness …

volatility of vacancies and unemployment. This channel can be relevant if the lack of insurance is large enough so that the … increases are enough for poor workers to accept job offers. This mechanism reduces the volatility of wages and increases the …

volatility, but generates substantially higher unemployment fluctuations in response to productivity shocks. Moreover, the policy … increases the volatility of all these variables in response to net worth shocks. The link between formal credit markets, input …