IDEAS home Printed from https://ideas.repec.org/a/oup/qjecon/v103y1988i1p147-165..html
   My bibliography  Save this article

Business Cycles With Costly Search and Recruiting

Author

Listed:
  • Peter Howitt

Abstract

A business cycle model is developed in which output is traded on Lucas-Phelps islands and labor services on each island are exchanged through costly search and recruiting with transactions externalities. The model exhibits persistent involuntary unemployment and inefficient equilibria, even though there are no nominal rigidities and no unexploited privately attainable gains from trade. It also exhibits employment fluctuations without any real-wage fluctuations. It yields a Lucas aggregate-supply curve (to a linear approximation). It also implies that the natural rate of unemployment depends positively upon the variability and persistence of relative price shocks.

Suggested Citation

  • Peter Howitt, 1988. "Business Cycles With Costly Search and Recruiting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 147-165.
    • Handle: RePEc:oup:qjecon:v:103:y:1988:i:1:p:147-165.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1882646
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:qjecon:v:103:y:1988:i:1:p:147-165.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/qje .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.