EconPapers    
Economics at your fingertips  
 

Shocks and Institutions in a Job Matching Model

Wouter Den Haan, Christian Haefke () and Garey Ramey
Authors registered in the RePEc Author Service: Wouter Denhaan ()

No 2970, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper explains the divergent behaviour of European and US unemployment rates using a job market-matching model of the labour market with an interaction between shocks and institutions. It shows that a reduction in TFP growth rates, an increase in real interest rates, and an increase in tax rates leads to a permanent increase in unemployment rates when the replacement rates or initial tax rates are high, while no increase in unemployment occurs when institutions are ‘employment friendly.’ The Paper also shows that an increase in turbulence, modelled as an increase probability of skill loss, is not a robust explanation for the European unemployment puzzle in the context of a matching model with both endogenous job creation and job destruction.

Keywords: job matching model; TFP slowdown; turbulence; unemployment; unemployment benefits (search for similar items in EconPapers)
JEL-codes: E24 J64 (search for similar items in EconPapers)
Date: 2001-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2970 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Shocks and Institutions in a Job Matching Model (2001) Downloads
Working Paper: Shocks and Institutions in a Job Matching Model (2001) Downloads
Working Paper: Shocks and institutions in a job matching model (2001) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2970

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2970

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-10-11
Handle: RePEc:cpr:ceprdp:2970