Equilibrium in Matching Models with Employment Dependent Productivity
In a standard search and matching framework, the labor market presents frictions while in the competitive product market the demand is infinitely elastic.To have a more realistic framework, some models abandon the assumption of infinite elasticity and consider a two-tier productive scheme in the goods market. In this paper, I establish the conditions that are sufficient for the existence and the uniqueness of a steady-state equilibrium for this kind of models. I also notice that some standard assumptions about the production and matching technology (a Cobb-Douglas function) do not fulfill such conditions and so may hinder the existence of an equilibrium.
Volume (Year): 29 (2009)
Issue (Month): 3 ()
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- Mortensen, Dale T. & Pissarides, Christopher A., 1999.
"New developments in models of search in the labor market,"
Handbook of Labor Economics,
in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627
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