Job Matching and Propagation
Garey Ramey and
University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego
In the U.S. labor maarket, the vacancy-unemployment ratio and unemployment react sluggishly to productivity shocks. We show that the job matching model in its standard form cannot reproduce these patterns due to excessively rapid vacancy responses. Extending the model to incorprate sunk costs for vacancy creation yields highly realistic dynamics. Creation costs induce entrant firms to smooth the adjustment of new openings following a shock, leading the stock of vacancies to react sluggishly.
Keywords: unemployment; vacancies; labor adjustment; matching (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Job matching and propagation (2007)
Working Paper: Job matching and propagation (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cdl:ucsdec:qt53s671h7
Access Statistics for this paper
More papers in University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff ().