The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited
Year: 2008
Type: article
Abstract: Recently, a number of authors have argued that the standard search model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies, given shocks of a plausible magnitude. We propose a new calibration strategy of the standard model that uses data on the cost of vacancy creation and cyclicality of wages to identify the two key parameters –- the value of nonmarket activity and the bargaining weights. Our calibration implies that the model is consistent with the data. (JEL E24, E32, J31, J63, J64)
Source: American Economic Review
DOI: 10.2139/ssrn.1080246
Authors: Marcus Hagedorn, Iourii Manovskii
Institutions: University of Zurich, University of Pennsylvania
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3122808218