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On the Introduction of Firing Costs

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Author Info
Steffen Ahrens
Dennis Wesselbaum

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Abstract

This paper provides a survey of the recent literature about firing costs and discusses the transmission channels of firing costs in a partial equilibrium context. In addition, we expand our analysis two types of firing costs in a New Keynesian model with purely endogenous separations. We further distinguish between the effects resulting from respecting and non-respecting the bonding critique. We find that the two types of firing costs do not show significant differences. However, respecting the bonding critique enhances the overall performance of the model

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1559.

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Length: 36 pages
Date of creation: Oct 2009
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Handle: RePEc:kie:kieliw:1559

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Related research
Keywords: Beveridge Curve; Endogenous Separations; Firing Costs;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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