social interaction co worker altruism and incentives social interaction with colleagues is an important job attribute for many workers to attract and retain workers managers therefore need to think about how to create and preserve high quality co worker relationships this paper develops a principal multi agent model where agents do not only engage in productive activities but also in social interaction with their colleagues which in turn creates co worker altruism we study how financial incentives for productive activities can improve or damage the work climate we show that both team incentives and relative incentives can help to create a good work climate

the effects of devaluation on the trade balance a critical view and re examination of mile s new results abstract in a often cited article miles 1979 claims to have shown empirically the validity of the global monetarist proposition that devaluations do not affect the balance of trade this paper first uses mile s own framework of analysis to reveal serious deficiencies in his methodology and tests that cast doubt on the validity of his results in a respecified trade balance equation we show that devaluations do affect the trade balance in the traditionally predicted direction the pivotal difference between the two specifications arises from our inclusion of relative price effects and longer lag structure for the exchange rate variable

devaluation and the j curve some evidence from ldcs within the international trade literature it is not uncommon to find arguments about whether devaluation will improve the trade balance it is argued that the flows of goods respond only with time lags to changes in the exchange rate the j curve terrn is used to describe the movement over time of the trade balance it may deteriorate at first and improvement may come later this paper presents a method by which one could detect the existence of the j curve the method is applied to four developing countries the empirical evidence supports the pattern of movemnent described by the j curve a major policy option for a country facing a persistent balance of payments deficit is said to be devaluation of its currency within the international trade literature it is not uncommon to find arguments about whether devaluation will improve the trade balance or the balance of payments for example proponents of the elasticities approach describe the necessary and sufficient conditions for an improvement in the trade balance in terms of elasticities of demand and supply referred to as the marshall lerner condition while there is abundant empirical evidence to suggest that these conditions are indeed met at least for industrial countries there have been circumstances under which 2 devaluation has not been successful for example one might wonder why the u s trade balance deteriorated so much in 1972 despite the devaluation of the dollar in 1971 this unfavorable effect of devaluation on the trade balance is termed the j curve phenomenon received for publication august 23 1984 revision accepted for publication november 26 1984 the university of wisconsin milwaukee i would like to thank two anonymous referees for their valuable comments on the initial draft of this paper 1 proponents of the absorption approach e g alexander 1952 describe how devaluation may change the terms of trade increase production and switch expenditures from foreign to domestic goods thus improving the trade balance international monetarists argue that devaluation reduces the real value of cash balances and or changes the relative price of traded and nontraded goods thus improving both the trade balance and the balance of payments 2 for an cstimate of the elasticities see houthakker and magee 1969 and warner and kreinin 1983 the former study provides the elasticities estimates under fixed exchange rates and the latter under floating rates this content downloaded from 157 55 39 17 on wed 31 aug 2016 04 39 37 utc all use subject to http about jstor org terms

the ir relevance of real wage rigidity in the new keynesian model with search frictions we explore the role of real wage dynamics in a new keynesian business cycle model with search and matching frictions in the labor market both job creation and destruction are endogenous we show that the model generates counterfactual inflation and labor market dynamics in particular it fails to generate a beveridge curve vacancies and unemployment are positively correlated introducing real wage rigidity leads to a negative correlation and increases the magnitude of labor market flows to more realistic values however inflation dynamics are only weakly affected by real wage rigidity this is because of the presence of labor market frictions which generate long run employment relationships the measure of real marginal cost that is relevant for inflation dynamics via the phillips curve contains a dynamic component that does not necessarily move with real wages

vacancies unemployment and the phillips curve abstract the canonical new keynesian phillips curve has become a standard component of models designed for monetary policy analysis however in the basic new keynesian model there is no unemployment all variation in labor input occurs along the intensive hours margin and the driving variable for inflation depends on workers marginal rates of substitution between leisure and consumption in this paper we incorporate a theory of unemployment into the new keynesian theory of inflation and empirically test its implications for inflation dynamics we show how a traditional phillips curve linking inflation and unemployment can be derived and how the elasticity of inflation with respect to unemployment depends on structural characteristics of the labor market such as the matching technology that pairs vacancies with unemployed workers we estimate on us data the phillips curve generated by the model while we can reject the baseline new keynesian phillips curve in favor of the search frictions specification we show it is still too stylized to fully describe the dynamics of firms marginal costs

the j curve in the emerging economies of eastern europe devaluation or depreciation of a currency worsens the trade balance before improving it resulting in a j curve pattern a new definition of the hypothesis implies a short run deterioration combined with the long run improvement by using monthly data over the january 1990 june 2005 period from 11 east european emerging economies most of which are the new european union eu members or the eu candidate countries this article uses the bounds testing approach to cointegration and error correction modelling and finds empirical support for the j curve hypothesis in three countries of bulgaria croatia and russia the results have important implications for policymakers involved in economics in terms of using exchange rate policy as a policy device to achieve real convergence toward eu standards

liquidity flows and fragility of business enterprises abstract this paper develops a macroeconomic model in which funds are channeled to entrepreneurs through long term relationships between entrepreneurs and lenders the flow of funds to a relationship may be low causing it to break up due to insufficient liquidity multiple pareto ranked steady states emerge from complementarity between financial intermediation reflected by the number of relationships and households incentives to provide funds this complementarity also serves as a mechanism for propagating aggregate shocks financial collapse may become inescapable if a shock destroys sufficiently many relationships

on the importance of the participation margin for labor market fluctuations abstract conventional analyses of labor market fluctuations ascribe a minor role to labor force participation we show by contrast that flows based analyses imply that the participation margin accounts for around one third of unemployment fluctuations a novel stock flow apparatus establishes these facts delivering three further contributions first the role of the participation margin appears robust to adjustments for spurious transitions induced by reporting error second conventional stocks based analyses are subject to a stock flow fallacy neglecting offsetting forces of worker flows on the participation rate third increases in labor force attachment among the unemployed during recessions are a leading explanation for the role of the participation margin

equilibrium unemployment job flows and inflation dynamics this paper develops a general equilibrium model to explain a set of facts regarding job flows unemployment and inflation dynamics it integrates a theory of equilibrium unemployment into a monetary model with nominal price rigidities the labor market displays matching frictions and endogenous job destruction the model can explain the cyclical behavior of unemployment job creation job destruction and the joint fluctuations of the labor input along both the extensive and the intensive margin conditional on a shock to monetary policy allowing for variation of the labor input at the extensive margin leads to a significantly lower elasticity of marginal costs with respect to output this helps to explain the sluggishness of inflation and the persistence of output after a monetary policy shock

consumption asymmetry and the stock market empirical evidence abstract this paper examines whether u s stock market value affects consumption asymmetrically using cointegration and error correction methodology the results confirm that stock market value asymmetrically affects real per capita consumption negative news affects consumption more than positive news

do matching frictions explain unemployment not in bad times this paper models unemployment as the result of matching frictions and job rationing job rationing is a shortage of jobs arising naturally in an economic equilibrium from the combination of some wage rigidity and diminishing marginal returns to labor during recessions job rationing is acute driving the rise in unemployment whereas matching frictions contribute little to unemployment intuitively in recessions jobs are lacking the labor market is slack recruiting is easy and inexpensive so matching frictions do not matter much in a calibrated model cyclical fluctuations in the composition of unemployment are quantitatively large

sectoral shifts and cyclical unemployment a substantial fraction of cyclical unemployment is better characterized as fluctuations of the frictional or natural rate than as deviations from some relatively stable natural rate shifts of employment demand between sectors of the economy necessitate continuous labor reallocation since it takes time for workers to find new jobs some unemployment is unavoidable this paper presents evidence that most of the unemployment fluctuations of the seventies unlike those in the sixties were induced by unusual structural shifts within the u s economy simple time series models of layoffs and unemployment are constructed that include a measure of structural shifts within the labor market these models are estimated and a derived natural rate series is constructed

is there a j curve abstract if the response of the value of the trade balance to movements in the real exchange rate is described by a j curve then a real depreciation initially worsens a balance of trade deficit only improving it over time this paper investigates whether a j curve can be detected in the last twenty five years of american data no statistically reliable evidence of a stable j curve is detected the model is checked extensively to support this finding

the nairu in theory and practice airu stands for the nonaccelerating ine ation rate of unemployment it is beyond dispute that this acronym is an ugly addition to the english language there are however two issues that fail to command consensus among economists which we address in this essay the e rst issue is whether the concept of the nairu is a useful piece of business cycle theory we believe it is and we begin this paper by attempting to explain why in our view the nairu is approximately a synonym for the natural rate of unemployment this concept follows naturally from any theory that says that changes in monetary policy and aggregate demand more generally push ine ation and unemployment in opposite directions in the short run once this short run tradeoff is admitted there must be some level of unemployment consistent with stable ine ation the second issue is why the nairu changes over time and in particular why it fell in the second half of the 1990s this question is more dife cult and the answer is open to debate most likely various factors are at work including demographics and government policies yet one hypothesis stands out as particularly promising e uctuations in the nairu appear related to e uctuations in productivity in the 1970s the nairu rose when productivity growth slowed in the 1990s the nairu fell when productivity growth sped up developing and testing models that explain the links among ine ation unemployment and productivity remains a challenge for students of business cycle theory

the j curve a literature review due to lag structure currency devaluation is said to worsen the trade balance first and improve it later resulting in a pattern that resemble the letter j hence the j curve phenomenon since its introduction by magee in 1973 brooking papers on economic activity 1 pp 303 25 a large number of studies have attempted to test the phenomenon using different techniques and different model specifications the results are at best ambiguous and deserve to be collected together for the future generation of researchers and graduate students this paper fills such a vacuum in the literature by reviewing the j curve related empirical papers

the governance of exchanges members cooperatives versus outside ownership the paper compares co operative governance structure to outside ownership the distinction between the two lies in who has residual rights of control it is found that a co operative becomes relatively less efficient as the environment becomes more competitive and the interests of members become more skewed these ideas are applied to the governance of exchanges this abstract was borrowed from another version of this item

evaluating the performance of the search and matching model abstract does the search and matching model fit aggregate u s labor market data while the model has become an important tool of macroeconomic analysis recent literature pointed to some significant failures in accounting for the data this paper aims to answer two questions i does the model fit the data and if so on what dimensions ii does the data fit the model i e what are the data which are relevant to be explained by the model the analysis shows that the model fits certain specifications of the data on many dimensions though not on all this includes capturing the high persistence and high volatility of most of the key variables the negative co variation of unemployment and vacancies and the behavior of the worker job finding rate a key role in this fit is played by the convexity of hiring costs and the stochastic properties of the separation rate the latter is a major component of the rate discounting the future value of the job worker match the paper offers a workable empirically grounded version of the model for the analysis of aggregate u s labor market dynamics

monetary policy under uncertainty in an estimated model with labor market frictions abstract we study the design of monetary policy in an estimated model with sticky prices search and matching frictions and staggered nominal wage bargaining we find that the estimated natural rate of unemployment is consistent with the nber description of the u s business cycle and that the inflation unemployment trade off facing monetary policymakers is quantitatively important we also show that parameter uncertainty has a limited effect on the performance or design of monetary policy while natural rate uncertainty has more sizeable effects nevertheless policy rules that respond to the output or unemployment gaps are more efficient than rules responding to output or unemployment growth rates also in the presence of uncertainty about the natural rates

on unemployment cycles in the euro area 1999 2018 abstract this paper studies the recurrent sources of unit root unemployment fluctuations in greece italy portugal spain and the euro area by integrating wage markup and labor disutility shocks that exhibit permanent euro area wide shifts country specific trend developments and stationary changes in an estimated dsge model in all economies these labor market shocks account for a negligible share of unemployment cycles demand shocks explain about 40 of them contribute to the pre crisis convergence of unemployment rates and shape the unemployment spikes during the great recession cross country relative price distortions and supply factors account for about 40 and 20 of those cycles respectively

house prices borrowing constraints and monetary policy in the business cycle i develop a general equilibrium model with sticky prices credit constraints nominal loans and asset prices changes in asset prices modify agents borrowing capacity through collateral value changes in nominal prices affect real repayments through debt deflation monetary policy shocks move asset and nominal prices in the same direction and are amplified and propagated over time the financial accelerator is not constant across shocks nominal debt stabilises supply shocks making the economy less volatile when the central bank controls the interest rate i discuss the role of equity debt indexation and household and firm leverage in the propagation mechanism finally i find that monetary policy should not target asset prices as a means of reducing output and inflation volatility

hysteresis in a new keynesian model this paper examines hysteresis in which persistent unemployment takes on structural characteristics over time hysteresis is modeled as deterioration in labor market matching efficiency as the average duration of unemployment increases this is embedded in a simple new keynesian macro model a decline in labor market matching efficiency would be consistent with the observed rightward shift of the beveridge curve since the 2007 09 recession hysteresis is shown to lead to larger and more persistent responses of the unemployment rate and unemployment duration to productivity intertemporal preference and monetary shocks hysteresis also generates an increase in the natural rate of unemployment

changes in the federal reserve s inflation target causes and consequences this paper estimates a new keynesian model to draw inferences about the behavior of the federal reserve s unobserved inflation target the results indicate that the target rose from 1 1 4 percent in 1959 to over 8 percent in the mid to late 1970s before falling back below 2 1 2 percent in 2004 the results also provide some support for the hypothesis that over the entire postwar period federal reserve policy has systematically translated short run price pressures set off by supply side shocks into more persistent movements in inflation itself although considerable uncertainty remains about the true source of shifts in the inflation target jel e31 e32 e52

do exchange rate changes have symmetric or asymmetric effects on the trade balances of asian countries abstractrecently the linear ardl approach was modified and a non linear version of the same approach that is used mostly to assess asymmetric effects of some exogenous variables on the dependent variable was introduced the non linear model was recently used by one study to show that indeed exchange rate changes have asymmetric effects on the trade balance of a few advanced countries the same was demonstrated for transition economies by another study in this article we provide additional asymmetric effects from seven asian economies by showing that in most cases we find evidence of short run and long run asymmetric effects of exchange rate changes on the trade balance like other studies our findings are country specific

investment shocks and business cycles abstract the origins of business cycles are still controversial among macroeconomists this paper contributes to this debate by studying the driving forces of fluctuations in an estimated new neoclassical synthesis model of the u s economy in this model most of the variability of output and hours at business cycle frequencies is due to shocks to the marginal efficiency of investment imperfect competition and to a lesser extent technological frictions are the key to their transmission although labor supply shocks explain a large fraction of the fluctuations in hours at very low frequencies they are irrelevant over the business cycle this finding is important because the microfoundations of these disturbances are widely regarded as unappealing

the nairu unemployment and monetary policy this paper examines the precision of conventional estimates of the nairu and the role of the nairu and unemployment in forecasting inflation the authors find that although there is a clear empirical phillips relation the nairu is imprecisely estimated forecasts of inflation are insensitive to the nairu and there are other leading indicators of inflation that are at least as good as unemployment this suggests deemphasizing the nairu in public discourse about monetary policy and instead drawing on a richer variety of leading indicators of inflation

the j curve revisited an empirical examination for the united states abstract this paper examines empirical evidence for trade prices and quantities for the united states to determine whether j curve effects have occurred in recent history empirical estimates of exchnage rate pass through and trade volume responses to exchange rate changes for the 1967 to 1987 period indicate that the often told tale of trade balance deterioration and then improvement the j shaped adjustment path has not typically been experienced by the united states expenditures on imports have typically increased following dollar depreciations primarily as a result of relatively inelastic import volume responses export earnings have been seen to rise only marginally during these same dollar depreciations due to increases in export prices and the subsequent reductions induced in export volume the long run merchandise trade balance adjustment path is seen to resemble a sine wave rather the a j

home equity mobility and macroeconomic fluctuations how does a fall in house prices affect real activity this paper presents a business cycle model in which a decline in house prices reduces geographical mobility creating distortions in the labor market this happens because homeowners face declines in their home equity levels after which it becomes more difficult to provide the down payment required for a new mortgage loan unemployed homeowners therefore turn down job offers that would require them to move the model explains joint cyclical patterns in housing and labor market aggregates as well as the puzzling breakdown of the u s beveridge curve that occurred during 2009

debt hangover in the aftermath of the great recession following the great recession u s government debt levels exceeded 100 of output we develop a macroeconomic model to evaluate the role of various shocks during and after the great recession labor market shocks have the greatest impact on macroeconomic activity we then evaluate the consequences of using alternative fiscal policy instruments to implement a fiscal austerity program to return the debt output ratio to its pre great recession level our welfare analysis reveals that there is not much difference between applying fiscal austerity through government spending the labor income tax or the consumption tax using the capital income tax is welfare reducing

unemployment and vacancies with sectoral shifts recent analyses of unemployment vacancy series suggest that aggregate shocks rather than sectoral shocks are the primary factors responsible for unemployment fluctuations this inference follows from two widely held beliefs sectoral shocks induce only positive unemployment vacancy comovements while negative comovements are necessarily the result of aggregate demand shocks this paper describes an equilibrium matching model that identifies plausible circumstances in which neither assumption is correct thus suggesting that unemployment vacancy data are inconclusive interestingly this model s novel results are due to standard features in the contracting literature firms experience relative price shocks and negotiate contracts that prescribe temporary layoffs copyright 1994 by american economic association

building a composite help wanted index abstract this paper builds a measure of vacancy posting over 1951 2009 that captures the behavior of total print and online help wanted advertising and can be used for time series analysis of the us labor market

a quantitative analysis of unemployment benefit extensions abstract 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 by 1 4 percentage points which is about 30 of the observed increase since 2007 moreover the contribution of the ui benefit extensions to the elevated unemployment rate increased during 2009 2011 while the number of vacancies recovered the successive extensions kept search intensity down

is there a long run relation between the trade balance and the real effective exchange rate of ldcs abstract using quarterly data over 1973 1988 period the cointegration analysis is used and it is shown that the trade balance and the real effective exchange rate of some ldcs are cointegrated in the long run this approach is argued to be a close substitute for testing the marshall lerner condition

the limits of equality insights from the israeli kibbutz what limits the capacity of society to redistribute what determines the structure of compensation in organizations striving for income equality this paper addresses these questions by investigating the economic and sociological forces underlying the persistence of the israeli kibbutzim communities based on the principle of income equality to do this i exploit newly assembled data on kibbutzim and a financial crisis in the late 1980s that affected them differentially the main findings are that 1 productive individuals are the most likely to exit and a kibbutz s wealth serves as a lock in device that increases the value of staying 2 higher wealth reduces exit and supports a high degree of income equality and 3 ideology facilitates income equality using a simple model i show that these findings are consistent with a view of the kibbutz as providing optimal insurance when members have the option of leaving more generally these findings contribute to an understanding of how mobility limits redistribution and to an understanding of the determinants of the sharing rule in other types of organizations such as professional partnerships cooperatives and labor managed firms

spatial lock in do falling house prices constrain residential mobility abstract falling house prices have caused numerous homeowners to suffer capital losses those with little home equity may be prevented from moving because of imperfections in housing finance markets the proceeds from the sale of their home may be insufficient to repay their mortgage and provide a down payment on a new home a data set of mortgages is used to examine the magnitude of these constraints estimates show that average mobility would have been 24 higher after 3 years had house prices not declined and after 4 years it would have been 33 higher among those with high initial loan to value ratios the differences are even greater

reallocation shocks persistence and nominal rigidities abstract we reconsider the role of reallocation shocks in a simple new keynesian model with search and matching frictions the sign of the conditional correlation between unemployment and vacancies depends on the degree of price rigidity and on the persistence of the shock therefore a non negligible role for reallocation shocks in driving business cycle fluctuations cannot be ruled out on theoretical grounds

residential mobility housing equity and the labour market henley a g 1998 residential mobility housing equity and the labour market economic journal 108 447 414 427

moving costs nondurable consumption and portfolio choice the substantial adjustment cost for housing affects nondurable consumption and portfolio allocations as well as the frequency of housing transactions a simple theoretical model roughly calibrated is used to assess the quantitative impact of adjustment costs on those decisions the impact on portfolios is found to be significant suggesting that housing wealth should be useful in empirical studies of portfolio choice the welfare loss from the transaction cost is also substantial the effect on nondurable consumption is small however so adjustment costs can explain only a small part of the equity premium puzzle

the future of u s agricultural cooperatives a neo institutional approach thirty years ago helmberger speculated that industrialization of agriculture would lead to the demise of farmer cooperatives helmberger 1966 p 1434 in responding to helmberger s prediction abrahamsen countered by suggesting that as industrialization of agriculture evolved cooperatives would increasingly become the farmer s integrating agency abrahamsen p 1442 in this paper i examine these two divergent opinions by a briefly describing the structural and strategic evolution of u s farmer cooperatives since the helmberger and abrahamsen h a forecasts b utilizing recent developments in neo institutional economic organizational economic theory to generate hypotheses regarding structural and strategic shifts in u s agricultural cooperatives and c further applying neo institutional economics to speculate what the future might hold for u s producerowned and controlled agricultural cooperatives

the unemployment volatility puzzle is wage stickiness the answer i discuss the failure of the canonical search and matching model to match the cyclical volatility in the job finding rate i show that job creation in the model is influenced by wages in new matches i summarize microeconometric evidence and find that wages in new matches are volatile and consistent with the model s key predictions therefore explanations of the unemployment volatility puzzle have to preserve the cyclical volatility of wages i discuss a modification of the model based on fixed matching costs that can increase cyclical unemployment volatility and is consistent with wage flexibility in new matches

introducing financial frictions and unemployment into a small open economy model the current nancial crisis has made it abundantly clear that business cycle modeling no longer can abstract from nancial factors it is also becoming increasingly clear that the stylized modeling of labor markets without explicit unemployment that is the current standard approach has its limitations some questions which the dominating extant business cycle models are mute on but that we would like to answer are how important are nancial and labor market frictions for the business cycle dynamics of a

business cycles and labor market search the quantitative implications of labor market search for economic fluctuations are evaluated in the context of a real business cycle model incorporating labor market search into the model is found to improve its empirical performance along several dimensions in particular hours now fluctuate substantially more than wages and the contemporaneous correlation between hours and productivity falls in addition the model replicates the observation that output growth displays positive autocorrelation at short horizons overall the empirical results suggest that the labor market search environment embodies a quantitatively important propagation mechanism copyright 1996 by american economic association

accounting for mismatch unemployment we investigate unemployment due to mismatch in the us over the past three decades we propose an accounting framework that allows us to estimate the overall amount of mismatch unemployment as well as the contribution of each of the frictions that caused the mismatch mismatch is quantitatively important for unemployment and the cyclical behavior of mismatch unemployment is very similar to that of the overall unemployment rate geographic mismatch is driven primarily by wage frictions mismatch across industries is driven by wage frictions as well as barriers to job mobility we nd virtually no role for worker mobility frictions

the comovement between output and prices abstract in this paper i analyze the comovement of us prices and output in the postwar period i use a new set of statistics to characterize the comovement between variables the statistics capture important information about the dynamics in the system the estimation procedure does not require assumptions about the order of integration or the types of assumptions needed for var decompositions i find that the comovement between output and prices is positive in the short run and negative in the long run i show that a model in which demand shocks dominate in the short run and supply shocks dominate in the long run can explain these empirical results while sticky price models with only demand shocks cannot

labor supply factors and economic fluctuations we propose a new v ar identication scheme that enables us to disentangle labor supply shocks from wage bargaining shocks identication is achieved by imposing robust sign restrictions that are derived from a new keynesian model with endogenous labor force par ticipation according to our analysis on us data over the period 1985 2014 labor supply shocks and wage bargaining shocks are important drivers of output and unemployment both in the short run and in the long run these results suggest that identication strategies used in estimated new keynesian models to disentangle labor market shocks may be misguided we also analyze the behavior of the labor force participation rate through the lenses of our model wend that labor supply shocks are the main drivers of the participation rate and account for about half of its decline in the aftermath of the great recession

inflation and labor market dynamics revisited abstract we demonstrate that the presence of an empirically plausible labor adjustment decision at the firm level rationalizes strategic complementarities in price setting which help explain inflation dynamics those strategic complementarities are typically assumed away in the related existing literature this motivates our revisiting of inflation and labor market dynamics

the establishment level behavior of vacancies and hiring this paper is the first to study vacancies hires and vacancy yields at the establishment level in the job openings and labor turnover survey a large sample of u s employers to interpret the data we develop a simple model that identifies the flow of new vacancies and the job filling rate for vacant positions the job filling rate moves counter to aggregate employment but rises steeply with employer growth rates in the cross section it falls with employer size rises with worker turnover rates and varies by a factor of four across major industry groups we also develop evidence that the employer level hiring technology exhibits constant returns and that at the employer level and that employers rely heavily on other instruments in addition to vacancies as they vary hires we also develop evidence that effective recruiting intensity per vacancy varies over time accounting for about 41 of movements in aggregate hires in the 2007 to 2009 period our evidence and analysis provide useful inputs for assessing developing and calibrating theoretical models of search matching and hiring in the labor market

a structural decomposition of the us yield curve abstract by expanding the macro part of macro finance models historical fluctuations in us bond yields turn out to be largely consistent with the rational expectations hypothesis we estimate a medium scale macro finance dsge model of the term structure to establish this our finding contrasts with existing macro finance models and suggests that their small scale or non structural perspective on the macroeconomy mutes expectations thereby underestimating the expectations hypothesis potential out of sample forecasts are competitive with more flexible term structure models given the empirical validation we interpret various episodes through the lens of the model and investigate which structural shocks cause the yield curve to contain information about future growth

household debt and labor market fluctuations abstract the co movements of labor productivity with output total hours vacancies and unemployment have changed since the mid 1980s this paper offers an explanation for the sharp break in the fluctuations of labor market variables based on endogenous labor supply decisions following the mortgage market deregulation we set up a search model with efficient bargaining and financial frictions in which impatient borrowers can take an amount of credit that cannot exceed a proportion of the expected value of their real estate holdings when borrowers equity requirements are low the impact of a positive technology shock on the marginal utility of consumption is strengthened which in turn results in lower hours per worker and higher wages in the bargaining process this shift in labor supply discourages firms from opening vacancies reducing the impact of the shock on employment we simulate the effects of an increase in both the loan to value ratio and the share of borrowers in total population our exercise shows that the response of labor market variables might have been substantially affected by the increase in household leverage in the us in the last twenty years

hot and cold seasons in the housing market every year housing markets in the united kingdom and the united states experience systematic above trend increases in prices and transactions during the spring and summer hot season and below trend falls during the autumn and winter cold season house price seasonality poses a challenge to existing housing models we propose a search and matching model with thick market effects in thick markets the quality of matches increases rising buyers willingness to pay and sellers desire to transact a small deterministic driver of seasonality can be amplified and revealed as deterministic seasonality in transactions and prices quantitatively mimicking seasonal fluctuations in uk and us markets

the determinants of equilibrium unemployment the paper takes the search and matching model of the aggregate labor market to the data it tests the model s empirical validity and employs structural estimation to generate a characterization of the optimal behavior of firms and workers the model is applied to israeli data that are uniquely suited for this kind of empirical investigation the structural estimates are used to quantify the frictions embodied in the model including the costs of search the congestion and trading externality effects and the matching process a calibration simulation analysis then studies the effect of several key variables on equilibrium unemployment

unemployment in the great recession did the housing market crisis prevent the unemployed from moving to take jobs the labor market in the great recession and its aftermath is characterized by great difficulty in escaping unemployment i present two empirical analyses of a particular explanation for that difficulty that the housing market crisis has prevented the unemployed from selling their homes and moving to take new jobs first i examine post job loss mobility rates by home ownership status using data from the displaced workers survey second i examine mobility rates for unemployed homeowners and renters from the month to month cps match neither analysis provides any support for the idea that the housing market crisis has reduced mobility of the unemployed

the impact of social structure on economic outcomes s ocial structure especially in the form of social networks affects economic outcomes for three main reasons first social networks affect the flow and the quality of information much information is subtle nuanced and difficult to verify so actors do not believe impersonal sources and instead rely on people they know second social networks are an important source of reward and punishment since these are often magnified in their impact when coming from others personally known third trust by which i mean the confidence that others will do the right thing despite a clear balance of incentives to the contrary emerges if it does in the context of a social network economists have recently devoted considerable attention to the impact of social structure and networks on the economy for example see the economists chapters in rauch and casella 2001 and the illuminating review essay of this volume by zuckerman 2003 as well as dutta and jackson 2003 and calvoarmengol 2004 however i focus here on sociologists contributions sociologists have developed core principles about the interactions of social structure information ability to punish or reward and trust that frequently recur in their analyses of political economic and other institutions i begin by reviewing some of these principles building on these i then discuss how social structures and social networks can affect economic outcomes like hiring price productivity and innovation

nominal loss aversion housing equity constraints and household mobility evidence from the united states abstract this paper exploits the recent variation in us house prices to examine the effect of equity constraints and nominal loss aversion on household mobility detailed data from the 1985 1996 national longitudinal survey of youth nlsy79 were matched with house price data from 149 metropolitan areas to estimate instrumental variables linear probability and semi parametric proportional hazard models of intra metropolitan mobility household mobility is significantly influenced by nominal loss aversion there is little evidence that low equity because of fallen house prices constrains mobility

mismatch shocks and unemployment during the great recession summary we investigate the macroeconomic consequences of fluctuations in the effectiveness of the labor market matching process with a focus on the great recession we conduct our analysis in the context of an estimated medium scale dynamic stochastic general equilibrium model with sticky prices and equilibrium search unemployment that features a shock to the matching efficiency or mismatch shock we find that this shock is not important for unemployment fluctuations in normal times however it plays a somewhat larger role during the great recession when it contributes to raise the actual unemployment rate by around 1 3 percentage points and the natural rate by around 2 percentage points the mismatch shock is the dominant driver of the natural rate of unemployment and explains part of the recent shift of the beveridge curve copyright 2016 john wiley sons ltd

social interactions and product quality the value of pooling in cooperative entrepreneurial networks why do cooperatives often pay a pooled price despite the free riding incentives it entails in this paper we highlight that a cooperative is an enterprise owned by a network of entrepreneurial members by taking explicitly into account the social interactions among entrepreneurial members and the impact of social ties on members product quality provisions we identify the circumstances when pooling is efficient it is shown that social interactions mitigate the free riding effect of pooling and that the amount of members social interactions depends upon and increases with the cooperative s pooling ratio we show that the complete pooling policy is not only economically efficient but also socially advantageous when the context of the cooperative is conducive to frequent social interactions among members