Simple Microfoundations for Cobb-Douglas Matching Functions
نویسنده
چکیده
This paper derives a Cobb-Douglas matching function as the aggregate of the number of matches made by each firm in a large economy using results from the theory of heavy tail distributions. The model is then calibrated using the empirical distribution of firm sizes and stylized facts about social networks.The implied elasticity of the matching function is found to be close to those reported by Shimer(2006). The residuals from a regression of V/U on the job finding rate are found to be graphically distributed with heavy tails, as implied by the model.
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New Microfoundations for the Aggregate Matching Function, with Empirical and Theoretical Implications
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