The Cyclical Behavior of Equilibrium Unemployment and Vacancies Across OECD Countries

Pedro Amaral and Murat Tasci

Koç University-TUSIAD Economic Research Forum Working Papers from Koc University-TUSIAD Economic Research Forum

Abstract: We show that the inability of a standardly-calibrated labor search-and-matching model to account for labor market volatility extends beyond the U.S. to a set of OECD countries. That is, the volatility puzzle is ubiquitous. We argue cross-country data is helpful in scrutinizing between potential solutions to this puzzle. To illustrate this, we show that the solution proposed in Hagedorn and Manovskii (2008) continues to deliver counterfactually low volatility in countries where labor productivity persistence and/or steady-state job-finding rates are sufficiently low. Moreover, the model's ability to generate high enough volatility depends on vacancy-filling rate levels that seem counterfactual outside the U.S.

Keywords: Labor Market; Vacancies; Unemployment; OECD countries. (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 J64 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2014-02
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: The cyclical behavior of equilibrium unemployment and vacancies across OECD countries (2016)
Working Paper: The Cyclical Behavior of Equilibrium Unemployment and Vacancies Across OECD Countries (2013)
Working Paper: The cyclical behavior of equilibrium unemployment and vacancies across OECD countries (2012)
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