Endogenous market structures and labour market dynamics

Andrea Colciago and Lorenza Rossi

No 12/2011, Bank of Finland Research Discussion Papers from Bank of Finland

Abstract: We propose a flexible prices model where endogenous market structures and search and matching frictions in the labour market interact endogenously. The interplay between firms endogenous entry, strategic interactions among producers and labour market frictions represents a strong amplification channel for technology shocks on labour market variables and helps in addressing the unemployment- volatility puzzle. Consistently with US evidence, new firms create a large fraction of new jobs and grow faster than more mature firms, net entry of firms is procyclical and the price mark-up is countercyclical.

Date: 2011
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Related works:
Working Paper: Endogenous Market Structures and Labor Market Dynamics (2011)
Working Paper: Endogenous Market Structures and Labor Market Dynamics (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofrdp:rdp2011_012

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