Abstract The canonical matching model is the workhorse of labour market but lacks a proper amplification mechanism for productivity shocks. One way to amplify effects shocks allow workers endogenously adjust their job search effort: as effort procyclical in model, volatilities increase. Yet, empirical literature points against effort, raising doubts how acyclical (or countercyclical) can coinci...

I develop a novel link between frictions in international financial markets and fiscal procyclicality.Complementing existing evidence, A decomposition of government expenditure into social spending public good reveals that the cyclical correlation exhibits biggest differences across countries. build small open economy model with income inequality, endogenous policy sovereign default risk to rat...

I develop a novel link between frictions in international financial markets and fiscal procyclicality. Complementing existing evidence, A decomposition of government expenditure into social spending and public good spending reveals that the cyclical correlation of social spending exhibits the biggest differences across countries. I build a small open economy model with income inequality, endoge...

Recently, a number of authors have argued that the standard search model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies, given shocks of a plausible magnitude. We propose a new calibration strategy of the standard model that uses data on the cost of vacancy creation and cyclicality of wages to identify the two key parameters the value of non...