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The separation rate cannot be exogenous

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  • Ben-David Nissim

Abstract

Many articles that used the matching frame model considered the separation rate as an exogenous variable and concentrated on the matching process. This assumption is inconsistent with the findings of many empirical studies, which indicate that business cycles are driven primarily by changes in the separation rate. This study demonstrates that, within the matching frame model, given uncertain productivity of newly employed workers the separation rate cannot be constant. Any change in the asset value of occupied jobs will lead to a change of the separation rate.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 12 (2005)
Issue (Month): 15 ()
Pages: 949-951

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Handle: RePEc:taf:apeclt:v:12:y:2005:i:15:p:949-951

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  1. Steve J. Davis & John Haltiwanger, 1991. "Gross Job Creation, Gross Job Destruction and Employment Reallocation," NBER Working Papers 3728, National Bureau of Economic Research, Inc.
  2. Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186 National Bureau of Economic Research, Inc.
  3. Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-79, December.
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Cited by:
  1. Shigeru Fujita & Garey Ramey, 2007. "Reassessing the Shimer facts," Working Papers 07-2, Federal Reserve Bank of Philadelphia.

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