More on Unemployment and Vacancy Fluctuations

By Dale T. Mortensen, Eva Nagypal. Social Science Research Network, 2007

493 citations recorded by the source corpus.

Shimer (2005a) argues that the Mortensen-Pissarides equilibrium search model of unemployment explains only about 10% of the response in the job-finding rate to an aggregate productivity shock. Some of the recent papers inspired by his critique are reviewed and commented on here. Specifically, we suggest that the sole problem is neither the procyclicality of the wage nor the failure to account fully for the opportunity cost of employment. Although an amended version of the model, one that accounts for capital costs and counter cyclic involuntary separations, does much better, it still explains only 40% of the observed volatility of the job-finding rate. Finally, allowing for on-the-job search does not improve the amended model's implications for the amplification of productivity shocks.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/eb47ab1469fd4570117bcfaeaaabac874b177a5d

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In Economics and Econometrics

Citations in the corpus

U.S. Labor Market Dynamics Revisited (2007, unknown): “1 For different analyses of this issue, see Yashiv (2006) and Mortensen and Nagypal (2007).”
Precautionary Saving Over the Business Cycle (2016, unknown): “The representative rm maximises its instantaneous prot ow t = ztG (Kt; nt) ntwt (Rt 1 + )Kt + vt ( t t c) ; (25)”
The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited (2008, background): “Its uniqueness in the Pissarides (1985, 2000) model with aggregate uncertainty was proven in Mortensen and Éva Nagypál (2007).”
Wages and commuting: quasi-natural experiments' evidence from firms that relocate (2014, unknown): “Mortensen and Nagypal (2007) propose in their survey paper a value of 0.5 for this parameter.16 The marginal effect of commuting distance at the avr ge commuting distance (17.5 km) is 0.0017.”
Unemployment Fluctuations with Staggered Nash Wage Bargaining (2006, background): “1 = (1− δ + r)βE © Λ ¡ s, s0 ¢ |s a , (34)”
Explaining the Spread of Temporary Jobs and its Impact on Labor Turnover (2016, unknown): “The values of the parameters are in the range of those chosen in the literature (see e.g. Mortensen and Pissarides, 1999, Shimer, 2005, and Mortensen and Nagypal, 2007).”
An Estimated Monetary DSGE Model with Unemployment and Staggered Nominal Wage Bargaining (2008, unknown): “Then Ut may be expressed as Ut = bt + βEtΛt,t+1 [st+1Vx,t+1 + (1− st+1)Ut+1] , (30)”
The Cyclical Volatility of Labor Markets Under Frictional Financial Markets (2010, unknown): “These are the total financial costs associated with the creation of a firm and that we shall denote by K ≡ e p(φ ∗) + k φ ∗p(φ ∗) (11)”
Anticipated Growth and Business Cycles in Matching Models (2009, background): “9 If 0 ! < 1, then wages respond less than proportionally to changes in pt; such wage rules are discussed in the section on strategic wage bargaining of Mortensen and Nagypál (2007)”
The Role of Labor Markets for Euro Area Monetary Policy (2009, unknown): “Mortensen and Nagypal (2007) stress that the outside option in the bargaining matters for the sign of the correlations conditional on the separation shock.”
Efficient Search on the Job and the Business Cycle (2011, unknown): “As in most of the related literature (e.g., Shimer 2005; Mortensen and Nagypál 2007), we restrict to be of the form , .gp(v) min {v , 1} g (0, 1) 6 The Weibull density function is n 1 nz z n z m 1 z m 1z z zf(z) p G 1 exp G 1 ,[ ( )] { [ ( )] }j j n j az z z z z where G is the gamma function.”