Resurrecting the participation margin
LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library
This paper considers a real business cycle model with search frictions in the labor market and labor supply which is elastic along the extensive (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 does indeed generate 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: J64 E24 E32 J21 (search for similar items in EconPapers)
Pages: 31 pages
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http://eprints.lse.ac.uk/19570/ Open access version. (application/pdf)
Working Paper: Resurrecting the Participation Margin (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:19570
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