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Can the matching model account for Spanish unemployment?

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  • Fonseca, Raquel
  • Munoz, Rafael

Abstract

This paper aims to explain the dynamics of the Spanish labour market, focussing in particular on the high persistence of unemployment and the dynamics around the Beveridge curve. We develop a stochastic dynamic general equilibrium model in which we assume that the labour market may be characterised by coordination failures in the matching process between vacancies and the unemployed. The model is then calibrated and simulated for the Spanish economy. Two sources of disturbances are considered: a traditional technological shock that initiates movements along the Beveridge curve; and realloction shocks that shift the Beveridge curve. Our results suggest that the model is capable of accounting for the main stylised facts characterising the Spanish labour market. We also analyse the movements around the Beveridge curve. Our results also indicate that reallocation shocks are the main source of shocks driving labour market dynamics.

Suggested Citation

  • Fonseca, Raquel & Munoz, Rafael, 2002. "Can the matching model account for Spanish unemployment?," CEPREMAP Working Papers (Couverture Orange) 0203, CEPREMAP.
  • Handle: RePEc:cpm:cepmap:0203
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    References listed on IDEAS

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    1. Dolado, Juan J. & Jimeno, Juan F., 1997. "The causes of Spanish unemployment: A structural VAR approach," European Economic Review, Elsevier, vol. 41(7), pages 1281-1307, July.
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    Citations

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    Cited by:

    1. Joydeep Bhattacharya & Helle Bunzel, 2003. "Dynamics of the planning solution in the discrete-time textbook model of labor market search and matching," Economics Bulletin, AccessEcon, vol. 5(19), pages 1-10.
    2. Fæhn, Taran & Gómez-Plana, Antonio G. & Kverndokk, Snorre, 2009. "Can a carbon permit system reduce Spanish unemployment?," Energy Economics, Elsevier, vol. 31(4), pages 595-604, July.
    3. Bhattacharya, J. & Bunzel, H., 2003. "Chaotic Planning Solutions in the Textbook Model of Labor Market Search and Matching," Discussion Paper 2003-15, Tilburg University, Center for Economic Research.
    4. Bartolucci, Cristian, 2012. "Business cycles and wage rigidity," Labour Economics, Elsevier, vol. 19(4), pages 568-583.
    5. José Ramón García Martínez & Valeri Sorolla, 2013. "Frictional and Non Frictional Unemployment in Models with Matching Frictions," Working Papers. Serie AD 2013-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    6. Héctor Sala & José I. Silva, 2009. "Flexibility at the margin and labour market volatility: The case of Spain," Investigaciones Economicas, Fundación SEPI, vol. 33(2), pages 145-178, May.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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