Title: Vacancy persistence
Description: "This paper reevaluates the  quantitative performance of the standard labor-market matching model developed  by Mortensen and Pissarides with special attention to the behavior of  vacancies, one of the key variables in the model.  I first estimate trivariate  vector autoregressions with gross worker flows and vacancies and identify an  aggregate shock by imposing only minimal sign restrictions on the responses of  worker flows and employment growth and no restrictions on the response of  vacancies.  The data strongly suggest a hump-shaped and persistent response of  vacancies.  The calibrated model, on the other hand, predicts that vacancies  respond to aggregate shocks with no delay and are not persistent even though an  aggregate productivity shock is assumed to be highly persistent.  These problems  in vacancy behavior also cause gross flow series to exhibit counterfactual  cyclical properties"--Federal Reserve Bank of Philadelphia web site.
Subjects: Econometric models, Job vacancies