Lotteries for consumers versus lotteries for firms
نویسندگان
چکیده
Prescott emphasizes similarities between lotteries that smooth nonconvexities for firms and for consumer-workers. We emphasize their differences. We also argue that models with employment lotteries that are used to generate unemployed individuals in a frictionless framework can have very different implications than models embodying frictional unemployment. As an illustration, models with employment lotteries predict effects from job destruction taxes that are opposite to those in search models.
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