Establishments dynamics and matching frictions in classical competitive equilibrium
By: Marcelo Veracierto.
Contributors: Federal Reserve Bank of Chicago. Research Dept..
Series: Working paper series -- WP-2007-16; Working paper series (Federal Reserve Bank of Chicago. Research Dept. : Online) -- WP-2007-16.
Publisher: Federal Reserve Bank of Chicago
Published: 2007
Place of publication: [Chicago, Ill.]
Language: eng
Format: Electronic resource
Description: "This paper develops a Walrasian equilibrium theory of establishment level dynamics and matching frictions and uses it to evaluate the effects of congestion externalities in the matching process and determine the government interventions that are needed to implement a Pareto optimal allocation.  The optimal policy, which involves a tax on the creation of help-wanted ads and an unemployment subsidy, is highly contractionary.  However, it leads to large welfare gains.  The policy also plays an important role in dampening the response of the economy to aggregate productivity shocks"--Federal Reserve Bank of Chicago web site.
Notes: Title from PDF file as viewed on 1/24/2008.

Includes bibliographical references.

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