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On the cyclicality of unemployment: Resurrecting the participation margin

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  • Ebell, Monique

Abstract

This paper considers a real business cycle model with search frictions in the labor market and labor supply which is elastic along the participation margin. Previous authors have found that such models generate counterfactually procyclical unemployment and a positively sloped Beveridge curve. This paper presents a calibrated model which succeeds at generating countercyclical unemployment and a negatively sloped Beveridge curve, despite the presence of a participation margin.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 18 (2011)
Issue (Month): 6 ()
Pages: 822-836

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Handle: RePEc:eee:labeco:v:18:y:2011:i:6:p:822-836

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Search; Business cycles; Labor market participation;

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References

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Citations

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Cited by:
  1. Didem Tuzemen, 2012. "Labor market dynamics with endogenous labor force participation and on-the-job search," Research Working Paper RWP 12-07, Federal Reserve Bank of Kansas City.
  2. Wei Cui & Sören Radde, 2014. "Search-Based Endogenous Illiquidity and the Macroeconomy," Discussion Papers of DIW Berlin 1367, DIW Berlin, German Institute for Economic Research.
  3. Sanjay K. Chugh & Christian Merkl, 2013. "Efficiency and Labor Market Dynamics in a Model of Labor Selection," Boston College Working Papers in Economics 846, Boston College Department of Economics.
  4. Michael W.L. Elsby & Bart Hobijn & Aysegül Sahin, 2013. "On the importance of the participation margin for market fluctuations," Working Paper Series 2013-05, Federal Reserve Bank of San Francisco.

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