Why is Unemployment so Countercyclical?

Lawrence Christiano, Martin Eichenbaum and Mathias Trabandt

No 26723, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We argue that wage inertia plays a pivotal role in allowing empirically plausible variants of the standard search and matching model to account for the large countercyclical response of unemployment to shocks.

JEL-codes: E0 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-dge and nep-mac
Note: EFG
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Citations: View citations in EconPapers (4)

Published as Lawrence J. Christiano & Martin S. Eichenbaum & Mathias Trabandt, 2021. "Why is unemployment so countercyclical?," Review of Economic Dynamics, vol 41, pages 4-37.

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Journal Article: Why is Unemployment so Countercyclical? (2021)
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