Why is Unemployment so Countercyclical?

Lawrence Christiano, Martin Eichenbaum and Mathias Trabandt

Review of Economic Dynamics, 2021, vol. 41, 4-37

Abstract: We argue that wage inertia plays a pivotal role in allowing empirically plausible variants of the standard search and matching model to account for the large countercyclical response of unemployment to shocks. (Copyright: Elsevier)

Date: 2021
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Citations: View citations in EconPapers (10)

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DOI: 10.1016/j.red.2021.04.008

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