More on unemployment and vacancy fluctuations
By: Dale T. Mortensen, Eva Nagypal.
Contributors: Nagypál, Éva.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11692; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11692.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Unemployment -- Mathematical models.; Job vacancies -- Mathematical models.; Labor market -- Mathematical models.
Description: "Shimer (2005a) argues that the Mortensen-Pissarides equilibrium search model of unemployment explains only about 10% of the response in the job-finding rate to an aggregate productivity shock.  Some of the recent papers inspired by his critique are reviewed and commented on here.  Specifically, we suggest that the sole problem is neither the procyclicality of the wage nor the failure to account fully for the opportunity cost of employment.  Although an amended version of the model, one that accounts for capital costs and counter cyclic involuntary separations, does much better, it still explains only 40% of the observed volatility of the job-finding rate.  Finally, allowing for on-the-job search does not improve the amended models implications for the amplification of productivity shocks"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 11/17/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.