Sector-specific productivity shocks in a matching model

Dennis Wesselbaum

Economic Modelling, 2011, vol. 28, issue 6, 2674-2682

Abstract: Endogenous separation matching models have the shortcoming that they are barely able to replicate the Beveridge curve (i.e. the negative correlation between unemployment and vacancies) and business cycle statistics jointly. This paper builds upon the sectoral shock literature and combines its insights with the standard endogenous separation matching approach. We show that the endogenous matching model with sectoral shocks can generate an aggregate Beveridge curve and performs reasonably well in explaining business cycle facts, especially compared to the one-sector baseline model.

Keywords: Beveridge curve; Endogenous separations; Sectoral productivity shock (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:6:p:2674-2682

DOI: 10.1016/j.econmod.2011.08.009

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