The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited

Marcus Hagedorn and Iourii Manovskii

American Economic Review, 2008, vol. 98, issue 4, 1692-1706

Abstract: Recently, a number of authors have argued that the standard search model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies, given shocks of a plausible magnitude. We propose a new calibration strategy of the standard model that uses data on the cost of vacancy creation and cyclicality of wages to identify the two key parameters –- the value of nonmarket activity and the bargaining weights. Our calibration implies that the model is consistent with the data. (JEL E24, E32, J31, J63, J64)

JEL-codes: E24 E32 J31 J63 J64 (search for similar items in EconPapers)
Date: 2008
Note: DOI: 10.1257/aer.98.4.1692
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Related works:
Working Paper: The cyclical behavior of equilibrium unemployment and vacancies revisited (2008)
Working Paper: The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited (2007)
Working Paper: The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited (2005)
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