Extensions of unemployment insurance (UI) benefits have been implemented in response to the Great Recession. This paper measures the effect of these extensions on the unemployment rate using a calibrated structural model featuring job search and consumption-saving decisions, skill depreciation, and UI eligibility. The ongoing UI benefit extensions are found to have raised the unemployment rate ...

This paper modifies the standard Mortensen-Pissarides job matching model in order to explain the cyclical behavior of vacancies and unemployment. The modifications include strategic wage bargaining (Hall and Milgrom, 2006) and convex labor adjustment costs. The results reveal that our model replicates the cyclical behavior of both variables remarkably well. First, we show that strategic wage ba...

This paper combines a search model and signaling game to analyze the interrelationship between labor market outcome and educational choices as well as relevant policy implications, featuring endogenous educational requirement for job application. It explains more than 60% of the unemployment rate difference between college and high school graduates. It predicts that higher unemployment benefit ...

We show that municipalities’ credit constraints can have important effects on local economies through a ratings channel. We identify these effects by exploiting exogenous variation on U.S. municipal bond ratings due to Moody’s recalibration of its ratings scale in 2010. We find that local governments increase expenditures and employment due to an expansion of their debt capacity following a rat...

The incidence of paravalvular leak (PVL) in patients who underwent mitral valve replacement is 7–17%. Hemolysis and congestive heart failure, which require an operation or intervention, are two main consequences with an incidence of 1–3%. In consequence of this reoperation is associated with high mortality and morbidity. A 48-year-old man who underwent coronary artery bypass and mitral valve re...

A Search Model of Unemployment and Inflation In this paper, I introduce money in the standard labor-matching model (Mortensen and Pissarides 1999, Pissarides 2000). A double coincidence problem makes Fiat Money necessary as a medium of exchange. In the long-run, a rise in the rate of money growth leads to higher inflation and higher unemployment, so the long-run Phillips curve is not vertical. ...

We analyze the following questions under imperfect labour markets. How does strategic outsourcing influence wage formation, profit sharing and employee effort when firms commit to optimal profit sharing before wage formation or decide for profit sharing after wage formation? What is the relationship between outsourcing, profit sharing, and equilibrium unemployment? We find that in both scenario...

This paper extends the now familiar Shapiro-Stiglitz (1984) model of labor market behavior to reconsider the controversial proposition that some forms of innovation have persistent displacement e ects. In particular, it nds that when distinctions between random production failures and reduced e ort level are di cult to draw, the adoption of new methods of production that compel more e ort, brea...

We propose a new business cycle theory. Firms need to randomize over firing or keeping workers who have performed poorly in the past, in order to give them an ex-ante incentive to exert effort. Firms have an incentive to coordinate the outcome of their randomizations, as coordination allows them to load the firing probability on states of the world in which it is costlier for workers to become ...

Search Frictions on Product and Labor Markets: Money in the Matching Function This paper builds a macroeconomic model of equilibrium unemployment in which firms persistently face difficulties in selling their production and this affects their decisions to create jobs. Due to search-frictions on the product market, equilibrium unemployment is a U-shaped function of the ratio of total demand to t...