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Matching efficiency and business cycle fluctuations

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  • Francesco Furlanetto

    ()

  • Nicolas Groshenny

    ()

Abstract

A large decline in the efficiency of the US 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 macroeconomic implications of matching efficiency shocks. We show that the propagation 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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File URL: http://cama.crawford.anu.edu.au/pdf/working-papers/2012/342012.pdf
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Bibliographic Info

Paper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University in its series CAMA Working Papers with number 2012-34.

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Length: 35 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:een:camaaa:2012-34

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Citations

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Cited by:
  1. Sala, Luca & Söderström, Ulf & Trigari, Antonella, 2012. "Structural and Cyclical Forces in the Labor Market During the Great Recession: Cross-Country Evidence," Working Paper Series 264, Sveriges Riksbank (Central Bank of Sweden).
  2. 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.
  3. Sedláček, Petr, 2014. "Match efficiency and firms' hiring standards," Journal of Monetary Economics, Elsevier, vol. 62(C), pages 123-133.
  4. Lawrence J. Christiano & Martin S. Eichenbaum & Mathias Trabandt, 2013. "Unemployment and business cycles," International Finance Discussion Papers 1089, Board of Governors of the Federal Reserve System (U.S.).
  5. 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.
  6. Poilly, Céline & Wesselbaum, Dennis, 2014. "Evaluating labor market reforms: A normative analysis," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 156-170.

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