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Is the matching function Cobb-Douglas?

Author

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  • Ausias Ribo1 (Universitat de Barcelona)
  • Montserrat Vilalta-Bufi (Universitat de Barcelona)

    (Universitat de Barcelona)

Abstract

We study the theoretical properties that particular matching functions must satisfy to represent a frictional labor market within a general equilibrium random matching model. We analyze Cobb-Douglas, CES and other functional forms of the matching function. Our findings establish restrictions on the parameters of these matching functions to ensure that the equilibrium is interior. These restrictions provide both theoretical reasons to choose among several functional forms and model misspecification tests for empirical work.

Suggested Citation

  • Ausias Ribo1 (Universitat de Barcelona) & Montserrat Vilalta-Bufi (Universitat de Barcelona), 2012. "Is the matching function Cobb-Douglas?," Working Papers in Economics 272, Universitat de Barcelona. Espai de Recerca en Economia.
  • Handle: RePEc:bar:bedcje:2012272
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    References listed on IDEAS

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    1. repec:wop:calsdi:97-23 is not listed on IDEAS
    2. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    3. Garey Ramey & Wouter J. den Haan & Joel Watson, 2000. "Job Destruction and Propagation of Shocks," American Economic Review, American Economic Association, vol. 90(3), pages 482-498, June.
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    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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