Search in Macroeconomic Models of the Labor Market

Richard Rogerson and Robert Shimer

No 15901, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This chapter assesses how models with search frictions have shaped our understanding of aggregate labor market outcomes in two contexts: business cycle fluctuations and long-run (trend) changes. We first consolidate data on aggregate labor market outcomes for a large set of OECD countries. We then ask how models with search improve our understanding of these data. Our results are mixed. Search models are useful for interpreting the behavior of some additional data series, but search frictions per se do not seem to improve our understanding of movements in total hours at either business cycle frequencies or in the long-run. Still, models with search seem promising as a framework for understanding how different wage setting processes affect aggregate labor market outcomes.

JEL-codes: E24 E32 J21 J64 (search for similar items in EconPapers)
Date: 2010-04
New Economics Papers: this item is included in nep-bec, nep-dge and nep-mac
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

Published as Search in Macroeconomic Models of the Labor Market,” 2010, wit h Richard Rogerson, Handbook of Labor Economics , volume 4A, edited by Orley Ashenfelter and David Card, 619–700.

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Chapter: Search in Macroeconomic Models of the Labor Market (2011)
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