Resurrecting the Participation Margin

Monique Ebell ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper considers a real business cycle model with search frictions in the labor market andlabor supply which is elastic along the participation margin. Previous authors have found thatsuch models generate counterfactually procyclical unemployment and a positively-slopedBeveridge curve. This paper presents a calibrated model which succeeds at generatingcountercyclical unemployment and a negatively-sloped Beveridge curve despite the presenceof a participation margin.

Keywords: Unemployment; Business Cycles; Labor Force Participation (search for similar items in EconPapers)
JEL-codes: E24 E32 J21 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dge, nep-lab and nep-mac
Date: 2008-06
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Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0873

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