Labor Market Matching under Imperfect Information
AbstractRecent research has shown that the standard labor matching model hasdifficulties in reproducing the co-movement patterns observed in US data. Thisis due to the fact that the standard model lacks sufficient propagation of shocks.This paper shows that refining the informational structure of the model leadsto improvements along this dimension: when agents cannot separately identifypersistent and transitory technology shocks on impact (so that they must solvea signal extraction problem), shocks are propagated. Under this specificationthe standard matching model even manages to make recoveries initially jobless,as in the data.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-098/2.
Date of creation: 30 Sep 2010
Date of revision: 13 May 2011
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imperfect information; labor market matching; signal extraction; jobless growth;
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-DGE-2011-02-26 (Dynamic General Equilibrium)
- NEP-LAB-2011-02-26 (Labour Economics)
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- Christian Glocker, 2012. "Unemployment compensation and aggregate fluctuations," International Review of Economics, Springer, vol. 59(1), pages 21-39, March.
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