This paper studies the role of investment-specific shocks as an amplification mechanism in the labor market fluctuations. We first show evidence that suggests that when technological advances make equipment more expensive, not only investment and output decrease but also firms post fewer vacancies, hours worked are reduced and unemployment increases. Moreover, we study the quantitative impact o...

We report results of economic policy experiments carried out in the framework of the EURACE agent-based macroeconomic model featuring a distinct geographical dimension and heterogeneous workers with respect to skill types. Using a calibrated model able to replicate a range of stylized facts of goods and labor markets, it is examined in how far effects differ if policy measures aiming at an impr...

In this paper, dynamic and stability analysis of a flexible cam-follower system is investigated. Equation of motion is derived considering flexibility of the follower and camshaft. Viscous and Coulomb frictions are considered in the rocker arm pivot. The normalized equation of motion of the system is a 2nd- order differential equation with periodic coefficients. Floquet theory is employed to s...

In the United States, health insurance for those under age 65 is typically provided through group plans purchased by employers from commercial insurers. In the health insurance market, insurers provide complex multi-attribute services, and search frictions arise as employers undertake the costly process of finding appropriate health insurance for their workers. These frictions distort market ou...

T he state of the labor market, employment and unemployment, plays an important role in the deliberations of policymakers, the Federal Reserve Bank included. Over the last 30 years, economic theory has led to substantial progress in understanding the mechanics of business cycles. Much of this progress in macroeconomics has been associated with the use of calibrated dynamic equilibrium models fo...

I derive bounds on price elasticities in a dynamic model that is mis-specified due to optimization frictions such as adjustment costs or inattention. The bounds are a function of the observed effect of a price change on demand, the size of the price change, and the degree of frictions. I measure the degree of frictions by the utility losses agents tolerate to make choices that deviate from the ...

This paper analyzes the problem of …rms that need to make investment decisions in capital markets characterized by trading frictions and ex-post bargaining. Trading frictions make switching from one capital supplier to another costly, thus implying that the match between …rms and suppliers generates surplus. Ex-post bargaining implies that suppliers can appropriate part of this surplus. Firms r...

This paper considers a real business cycle model with search frictions in the labor market and labor supply which is elastic along the participation margin. Previous authors have found that such models generate counterfactually procyclical unemployment and a positively-sloped Beveridge curve. This paper presents a calibrated model which succeeds at generating countercyclical unemployment and a ...