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Can the Matching Model Account for Spanish Unemployment ?

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  • Fonseca, Raquel

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Muñoz, Rafael

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

This paper aims at explaining the dynamics of labor markets in Spain, especially the high persistence of unemployment and the Beveridge curve. We build a stochastic dynamic general equilibrium matching model, which assumes failures in the matching between vacancies and unemployed. We calibrate the model for the Spanish economy and simulate it considering two sources of exogenous shocks: a technological one and a reallocation one. The model is able to mimic the main stylized facts for the Spanish labor market. Moreover, we show that reallocation shocks are the main source that drive the labor market dynamics. We also analyze the dynamics of the Beveridge curve for Spain.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 1999012.

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Length: 17
Date of creation: 01 Jan 1999
Date of revision:
Handle: RePEc:ctl:louvir:1999012

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Keywords: Matching; unemployment; Beveridge curve;

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References

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  1. Chéron, A. & Langot, François, 1999. "The Phillips and Beveridge curves revisited," CEPREMAP Working Papers (Couverture Orange) 9905, CEPREMAP.
  2. Danthine, Jean-Pierre & Donaldson, John B., 1990. "Efficiency wages and the business cycle puzzle," European Economic Review, Elsevier, vol. 34(7), pages 1275-1301, November.
  3. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
  4. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November.
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  7. Samuel Bentolila, . "Internal migration in Spain," Working Papers 2001-07, FEDEA.
  8. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 397-415, July.
  9. François LANGOT & Muriel PUCCI, 1996. "Participation, unemployment and wage bargaining in a real business cycle model," Discussion Papers (REL - Recherches Economiques de Louvain) 1996034, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  10. Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
  11. Marimon, Ramon & Zilibotti, Fabrizio, 1996. "'Actual' versus 'Virtual' Employment in Europe: Is Spain Different?," CEPR Discussion Papers 1427, C.E.P.R. Discussion Papers.
  12. Juan José Dolado & Ramón Gómez, 1997. "La relación entre desempleo y vacantes en España: perturbaciones agregadas y de reasignación," Investigaciones Economicas, Fundación SEPI, vol. 21(3), pages 441-472, September.
  13. Craig Burnside & Martin Eichenbaum & Sergio Rebelo, 1993. "Labor Hoarding and the Business Cycle," NBER Working Papers 3556, National Bureau of Economic Research, Inc.
  14. Merz, Monika, 1999. "Heterogeneous job-matches and the cyclical behavior of labor turnover," Journal of Monetary Economics, Elsevier, vol. 43(1), pages 91-124, February.
  15. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 279-98, April.
  16. Juan J. Dolado & Juan F. Jimeno, . "The causes of Spanish unemployment: A structural VAR apporach," Working Papers 96-19, FEDEA.
  17. Una-Louise Bell, 1997. "A Comparative Analysis of the Aggregate Matching Process in France, Great Britain and Spain," Banco de Espa�a Working Papers 9721, Banco de Espa�a.
  18. Roger E. A. Farmer, 1999. "Macroeconomics of Self-fulfilling Prophecies, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262062038.
  19. Jacques, J.F. & Langot, F., 1992. "Persistance du chomage et marche du travail, la dynamique de la courbe de beveridge," Papiers d'Economie Mathématique et Applications 92.34, Université Panthéon-Sorbonne (Paris 1).
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  22. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-70, November.
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Cited by:
  1. José Ramón García Martínez & Valeri Sorolla, 2013. "Frictional and Non Frictional Unemployment in Models with Matching Frictions," Working Papers. Serie AD 2013-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Héctor Sala & José I. Silva, 2009. "Flexibility at the margin and labour market volatility: The case of Spain," Investigaciones Economicas, Fundación SEPI, vol. 33(2), pages 145-178, May.
  3. Bartolucci, Cristian, 2012. "Business cycles and wage rigidity," Labour Economics, Elsevier, vol. 19(4), pages 568-583.
  4. Taran Fæhn & Antonio G. Gómez-Plana & Snorre Kverndokk, 2005. "Can a carbon permit system reduce Spanish unemployment?," Discussion Papers 410, Research Department of Statistics Norway.
  5. Bhattacharya, Joydeep & Bunzel, Helle, 2003. "Dynamics of the Planning Solution in the Discrete-Time Textbook Model of Labor Market Search and Matching," Staff General Research Papers 10253, Iowa State University, Department of Economics.

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