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Business cycle asymmetries and the labor market

Britta Kohlbrecher () and Christian Merkl ()

No 01/2016, FAU Discussion Papers in Economics from Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics

Abstract: This paper shows that the matching function and the Beveridge curve in the United States exhibit strong nonlinearities over the business cycle. These patterns can be replicated by enhancing a search and matching model with idiosyncratic productivity shocks for new contacts. Large negative aggregate shocks move the hiring cutoff point into a part of the idiosyncratic density function with higher density and thereby generate large, asymmetric job-finding rate and unemployment reactions. Our proposed mechanism is of high relevance as it leads to time varying effects of certain policy interventions.

Keywords: business cycle asymmetries; matching function; Beverdige curve; job-finding rate; unemployment; effectiveness of policy (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mac
Date: 2016
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https://www.econstor.eu/bitstream/10419/130164/1/856304379.pdf (application/pdf)

Related works:
Working Paper: Business Cycle Asymmetries and the Labor Market (2016) Downloads
Working Paper: Business Cycle Asymmetries and the Labor Market (2016) Downloads
Working Paper: Business Cycle Asymmetries and the Labor Market (2016) Downloads
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