A Natural Rate Model of Frictional and Long-term Unemployment
A simple labor market with spatial separation and Markov production shocks is presented. In the stationary equilibrium, some workers are frictionally unemployed and others are long-term unemployed. The amounts of frictional and long-term unemployment at each location depend on its recent history of productivity shocks, producing a local hysteresis effect. Changes in the parameters affect the equilibrium aggregate amounts of frictional and long-term unemployment differently. In particular, economies with larger moving costs will have more long-term and total unemployment, but less frictional unemployment. This finding is broadly consistent with recently reported stylized facts.
Volume (Year): 23 (1990)
Issue (Month): 3 (August)
|Contact details of provider:|| Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4|
Web page: http://economics.ca/cje/
More information through EDIRC
|Order Information:|| Web: http://economics.ca/en/membership.php Email: |