òòò½Íø Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited
òòò½Íø Review
vol. 98,
no. 4, September 2008
(pp. 1692–1706)
Abstract
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 nonmarket activity and the bargaining weights. Our calibration implies that the model is consistent with the data. (JEL E24, E32, J31, J63, J64)Citation
Hagedorn, Marcus, and Iourii Manovskii. 2008. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited." òòò½Íø Review 98 (4): 1692–1706. DOI: 10.1257/aer.98.4.1692Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution
- E32 Business Fluctuations; Cycles
- J31 Wage Level and Structure; Wage Differentials
- J63 Labor Turnover; Vacancies; Layoffs
- J64 Unemployment: Models, Duration, Incidence, and Job Search