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Matching efficiency and business cycle fluctuations

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  • Francesco Furlanetto

    ()
    (Norges Bank (Central Bank of Norway))

  • Nicolas Groshenny

    ()
    (Reserve Bank of New Zealand)

Abstract

A large decline in the e¢ ciency of the U.S. labor market in matching unemployed workers and vacant jobs has been documented during the Great Recession. We use a simple New Keynesian model with search and matching frictions in the labor market to study the propagation of matching e¢ ciency shocks. We show that the transmission of these disturbances and their importance for business cycle fluctuations depend crucially on the form of hiring costs and on the presence of nominal rigidities.

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Bibliographic Info

Paper provided by Norges Bank in its series Working Paper with number 2012/07.

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Length: 34 pages
Date of creation: 30 Apr 2012
Date of revision:
Handle: RePEc:bno:worpap:2012_07

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Keywords: Resource curse; Political economy.;

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Citations

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Cited by:
  1. Lawrence J. Christiano & Martin S. Eichenbaum & Mathias Trabandt, 2013. "Unemployment and Business Cycles," NBER Working Papers 19265, National Bureau of Economic Research, Inc.
  2. Poilly, Céline & Wesselbaum, Dennis, 2014. "Evaluating labor market reforms: A normative analysis," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 156-170.
  3. Sala, Luca & Söderström, Ulf & Trigari, Antonella, 2012. "Structural and Cyclical Forces in the Labor Market During the Great Recession: Cross-Country Evidence," CEPR Discussion Papers 9167, C.E.P.R. Discussion Papers.
  4. Sedláček, Petr, 2014. "Match efficiency and firms' hiring standards," Journal of Monetary Economics, Elsevier, vol. 62(C), pages 123-133.
  5. Rebecca Craigie & David Gillmore & Nicolas Groshenny, 2012. "Matching workers with jobs:how well is the New Zealand labour market doing?," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 75, pages 3-12, December.
  6. Alejandro Justiniano, 2012. "Comment on "Structural and Cyclical Forces in the Labor Market during the Great Recession: Cross-Country Evidence"," NBER Chapters, in: NBER International Seminar on Macroeconomics 2012, pages 415-424 National Bureau of Economic Research, Inc.

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