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Directed search, unemployment and public policy

Benoit Julien (), John Kennes (), Ian King () and Sephorah Mangin ()

Canadian Journal of Economics, 2009, vol. 42, issue 3, 956-983

Abstract: We examine the effects of public policy parameters in a simple directed search model of the labour market, and contrast them with those in standard random matching models with Nash bargaining. Both finite and limit versions of the directed search model are considered, and the value of the limit model as an approximation of the finite one is assessed. As with the random matching model, job creation is the key channel through which the policy parameters affect the equilibrium of the directed search model. Both comparative static effects of the policy parameters and optimal configurations are identified.

JEL-codes: H21 J64 (search for similar items in EconPapers)
Date: 2009
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