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Sector-Specific Productivity Shocks in a Matching Model

  • Dennis Wesselbaum

Shocks driving the business cycle have different effects on low-skilled and high-skilled workers. This paper studies the effects of temporary and permanent sector-specific shocks in a New Keynesian matching model. We show that temporary sector-specific shocks have reallaction and aggregate effects. Permanent shocks explain wedges in real wages and different performances in labor markets. Furthermore, the model is able to replicate an aggregate Beveridge curve

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File URL: https://www.ifw-members.ifw-kiel.de/publications/sector-specific-productivity-shocks-in-a-matching-model-1/kwp-1585.pdf
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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1585.

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Length: 26 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:kie:kieliw:1585
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