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Indeterminacy and search theory Author info | Abstract | Publisher info | Download info | Related research | Statistics Nicola Giammarioli () (European Central Bank, Kaiserstrasse, 29, 60311, Frankfurt am Main, Germany. )
This paper investigates a dynamic general equilibrium model with search. In particular, search externalities are reflected by an increasing returns to scale matching function, which may imply an indeterminate equilibrium. Hence, the model is capable to generate business fluctuations, driven by self-fulfilling belief, characterised by unemployment persistence. A numerical simulation shows that the degree of externalities needed for indeterminacy is not too far from existing empirical estimates and the implied dynamics of employment is richer then that of standard RBC models with search. JEL Classification: E10; E24; J64.
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Paper provided by European Central Bank in its series Working Paper Series with number
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Length: 46 pages
Date of creation: Sep 2003Date of revision:
Handle: RePEc:ecb:ecbwps:20030271Contact details of provider: Postal: Postfach 16 03 19, Frankfurt am Main, Germany Phone: +49 69 1344 0 Fax: +49 69 1344 6000 Web page: http://www.ecb.europa.eu/home/html/index.en.html More information through EDIRC
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Keywords: Search theory ; matching function ; indeterminacy ; general equilibrium. ; Other versions of this item:
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Thomas Lubik & Michael Krause, 2004.
"A Note on Instability and Indeterminacy in Search and Matching Models ,"
Economics Working Paper Archive
518, The Johns Hopkins University,Department of Economics.
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