Long Live the Vacancy

Christian Haefke () and Michael Reiter

No 20200054, Working Papers from New York University Abu Dhabi, Department of Social Science

Abstract: We reassess the role of vacancies in a Diamond-Mortensen-Pissarides style search and matching model. In the absence of free entry long lived vacancies and endogenous separations give rise to a vacancy depletion channel which we identify via joint unemployment and vacancy dynamics. We show conditions for constrained efficiency and discuss important implications of vacancy longevity for modeling and calibration, in particular regarding match cyclicality and wages. When calibrated to the postwar US economy, the model explains not only standard deviations and autocorrelations of labor market variables, but also their dynamic correlations with only one shock. JEL codes: E24, E32, J63, J64

Pages: 45 pages
Date: 2020-09, Revised 2020-09
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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https://nyuad.nyu.edu/content/dam/nyuad/academics/ ... papers/2020/0054.pdf First version, 2020 (application/pdf)

Related works:
Working Paper: Long Live the Vacancy (2020)
Working Paper: Long Live the Vacancy (2020)
Working Paper: Long Live the Vacancy (2020)
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