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Equilibrium Unemployment

João Gomes (), Jeremy Greenwood and Sergio Rebelo ()

No 1602, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A search-theoretic general equilibrium model of frictional unemployment is shown to be consistent with some of the key regularities of unemployment over the business cycle. In the model the return to a job moves stochastically. Agents can choose either to quit and search for a better job, or continue working. Search generates job offers that agents can accept or reject. Two distinguishing features of current work, relative to the existing business cycle literature on labour market fluctuations, are: (i) the decision to accept or reject jobs is modelled explicitly; and (ii) there is imperfect insurance against unemployment.

Keywords: Business Cycles; Unemployment (search for similar items in EconPapers)
JEL-codes: E24 E32 (search for similar items in EconPapers)
Date: 1997-03
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Related works:
Journal Article: Equilibrium unemployment (2001) Downloads
Working Paper: Equilibrium Unemployment (2001) Downloads
Working Paper: Equilibrium Unemployment (1997) Downloads
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