Exogenous versus Endogenous Separation

Shigeru Fujita and Garey Ramey

American Economic Journal: Macroeconomics, 2012, vol. 4, issue 4, 68-93

Abstract: This paper assesses how various approaches to modeling the separation margin affect the quantitative ability of the Mortensen-Pissarides labor matching model. The model with a constant separation rate fails to produce realistic volatility and productivity responsiveness of the separation rate and worker flows. The specification with endogenous separation succeeds along these dimensions. Allowing for on-the-job search enables the model to replicate the Beveridge curve. All specifications, however, fail to generate sufficient volatility of the job finding rate. While adopting the Hagedorn-Manovskii calibration remedies this problem, the volume of job-to-job transitions in the on-the-job search specification becomes essentially zero. (JEL E24, J41, J64)

JEL-codes: E24 J41 J64 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/mac.4.4.68
References: Add references at CitEc
Citations: View citations in EconPapers (81)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/mac.4.4.68 (application/pdf)
http://www.aeaweb.org/aej/mac/data/2011-0236_data.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmac:v:4:y:2012:i:4:p:68-93

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Macroeconomics is currently edited by Simon Gilchrist

More articles in American Economic Journal: Macroeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().