Search and matching frictions and business cycle fluctuations in Bulgaria

Aleksandar Vasilev

EconStor Open Access Articles and Book Chapters, 2020, vol. 19, issue 3, 319-340

Abstract: In this paper we investigate the quantitative importance of search and matching frictions in Bulgarian labor markets. This is done by augmenting an otherwise standard real business cycle model a la Long and Plosser (1983) with both a two-sided costly search and fiscal policy. This introduces a strong propagation mechanism that allows the model to capture the business cycles in Bulgaria better than earlier models. The model performs well vis-a-vis data, especially along the labor market dimension, and in addition dominates the market-clearing labor market framework featured in the standard RBC model, e.g Vasilev (2009), as well as the indivisible labor extension used in Hansen (1985).

Keywords: general equilibrium; unemployment and wages; business cycles; fiscal policy (search for similar items in EconPapers)
JEL-codes: D51 E24 E32 J40 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/230887/1/search_model_BG_accepted.pdf (application/pdf)

Related works:
Journal Article: Search and Matching Frictions and Business Cycle Fluctuations in Bulgaria (2020)
Working Paper: Search and Matching Frictions and Business Cycle Fluctuations in Bulgaria (2016)
Working Paper: Search and matching frictions and business cycle fluctuations in Bulgaria (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:230887

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