This paper explores the possibility of privately inefficient job separations due to bargaining friction and its implications for the unemployment dynamics. I propose a simple specification of bargaining friction by including bargaining wedges in the standard Nash bargaining model. Such...

This paper studies the unemployment accelerator, a mechanism where workers directly affect the firms' financial conditions, and, in turn, firms' financial conditions feedback again to the real economy. The unemployment accelerator builds on two key assumptions: search frictions in the labor...

The empirical literature addressing links between the labor and the marriage markets is numerous and varied. Despite this, the theoretical (equilibrium) literature that explicitly links the two markets is less developed, particularly so with frictional markets. We build an equilibrium search...

We present a generalization of the standard random-search model of unemployment in which firms hire multiple workers and in which the hiring process is time-consuming as well as costly. We follow Stole and Zwiebel (1996a,b) and assume that wages are determined by continuous bargaining between...