Matching efficiency and business cycle fluctuations

Francesco Furlanetto and Nicolas Groshenny

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: A large decline in the efficiency of the US labor market in matching unemployed workers and vacant jobs has been documented during the Great Recession. We use a simple New Keynesian model with search and matching frictions in the labor market to study the macroeconomic implications of matching efficiency shocks. We show that the propagation of these disturbances and their importance for business cycle fluctuations depend crucially on the form of hiring costs and on the presence of nominal rigidities.

Pages: 35 pages
Date: 2012-07
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Citations: View citations in EconPapers (13)

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Working Paper: Matching efficiency and business cycle fluctuations (2012)
Working Paper: Matching efficiency and business cycle fluctuations (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2012-34

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