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Job Creation and Job Destruction in the Theory of Unemployment


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  • Mortensen, Dale T
  • Pissarides, Christopher A


In this paper, the authors model a job-specific shock process in the matching model of unemployment with noncooperative wage behavior. They obtain endogenous job creation and job destruction processes and study their properties. The authors show that an aggregate shock induces negative correlation between job creation and job destruction, whereas a dispersion shock induces positive correlation. The job destruction process is shown to have more volatile dynamics than the job creation process. In simulations, the authors show that an aggregate shock process proxies reasonably well the cyclical behavior of job creation and job destruction in the United States. Copyright 1994 by The Review of Economic Studies Limited.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Economic Studies.

Volume (Year): 61 (1994)
Issue (Month): 3 (July)
Pages: 397-415

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Handle: RePEc:bla:restud:v:61:y:1994:i:3:p:397-415

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Blog mentions

As found by, the blog aggregator for Economics research:
  1. Diamond, Mortensen et Pissarides, Nobel d'économie 2010
    by Alexandre Delaigue in Econoclaste on 2010-10-11 14:49:33
  2. Više o Diamondu
    by cronomy in Cronomy on 2010-10-12 04:39:59
  3. Rethinking the labor matching function
    by Economic Logician in Economic Logic on 2009-03-13 15:14:00
  4. Nobel de economía 2010 para investigadores del desempleo
    by Marco Antonio Moreno in Elblogsalmon on 2010-10-11 16:39:00
  5. Peter A. Diamond, Dale T. Mortensen, Christopher A. Pissarides
    by jccavalcanti in on 2010-11-03 16:45:18

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  1. > Macroeconomics > Economic Fluctuations > Real Business Cycle Theory > Labor in RBC models
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