Resurrecting the Participation Margin
CEP Discussion Papers from Centre for Economic Performance, LSE
This paper considers a real business cycle model with search frictions in the labor market and labor supply which is elastic along the participation margin. Previous authors have found that such models generate counterfactually procyclical unemployment and a positively-sloped Beveridge curve. This paper presents a calibrated model which succeeds at generating countercyclical unemployment and a negatively-sloped Beveridge curve despite the presence of a participation margin.
Keywords: Unemployment; Business Cycles; Labor Force Participation (search for similar items in EconPapers)
JEL-codes: E24 E32 J21 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dge, nep-lab and nep-mac
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Working Paper: Resurrecting the participation margin (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0873
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