The Business Cycle Mechanics of Search and Matching Models
Joshua Bernstein (),
Alexander Richter () and
No 2026, Working Papers from Federal Reserve Bank of Dallas
This paper estimates a real business cycle model with unemployment driven by shocks to labor productivity and the job separation rate. We make two contributions. First, we develop a new identification scheme based on the matching elasticity that allows the model to perfectly match a range of labor market moments, including the volatilities of unemployment and vacancies. Second, we use our model to revisit the importance of shocks to the job separation rate and highlight how their correlation with labor productivity affects their transmission mechanism.
Keywords: Real Business Cycles; Estimation; Unemployment; Separation Rate; Vacancies (search for similar items in EconPapers)
JEL-codes: C13 E24 E32 E37 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddwp:88636
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