Endogenous Market Structures and Labor Market Dynamics

Andrea Colciago and Lorenza Rossi

No 139, Quaderni di Dipartimento from University of Pavia, Department of Economics and Quantitative Methods

Abstract: We propose a flexible prices model where endogenous market structures and search and matching frictions in the labor market interact endogenously. The interplay between firms endogenous entry, strategic interactions among producers and labor market frictions represents a strong amplification channel of technology shocks on labor market variables, and helps addressing the unemployment-volatility puzzle. Consistently with U.S. evidence, new firms create a large fraction of new jobs and grow faster than more mature firms, net firms’ entry is procyclical and the price mark up is countercyclical.

Keywords: Endogenous Market Structures; Firms’ Entry; Search and Matching Frictions (search for similar items in EconPapers)
JEL-codes: E24 E32 L11 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2011-02, Revised 2011-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Endogenous Market Structures and Labor Market Dynamics (2011)
Working Paper: Endogenous market structures and labour market dynamics (2011)
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