CEP Discussion Paper No 839 November 2007 The Unemployment Volatility Puzzle : Is Wage Stickiness the Answer ?
نویسنده
چکیده
I study the cyclical behavior of an equilibrium search model with endogenous job creation and destruction, with focus on the model’s failure to match the observed cyclical volatility of unemployment. Job creation in the model is influenced by wages in new matches. I summarize microeconometric evidence on wages in new matches and show that the key model elasticities are consistent with the evidence. Therefore explanations of the unemployment volatility puzzle have to preserve the cyclical volatility of wages. I discuss some extensions of the model that can increase cyclical unemployment volatility through mechanisms other than wage stickiness.
منابع مشابه
The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?
I study the cyclical behavior of an equilibrium search model with endogenous job creation and destruction and extract from it a wage equation that can be compared with the econometric evidence. Job creation in the model is influenced by wages in new matches. I summarize microeconometric evidence on wages in new matches and show that the key model elasticities are consistent with the evidence. T...
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