Job Creation and Job Destruction in the Theory of Unemployment

Mortensen, Dale T.; Pissarides, Christopher

doi:10.2307/2297896

Cited by 2,927 publications

(2,538 citation statements)

References 9 publications

Supporting

Mentioning

2,432

Contrasting

Unclassified

Order By: Relevance

“…Second, we include the labor market search and matching framework of Mortensen and Pissarides (1994) (2007) into the small open economy model. We integrate this into our speci…c framework -which includes capital and monetary factors -following the labor market version of Gertler, Sala and Trigari (2008).…”

Section: Introductionmentioning

confidence: 99%

“…This section replaces the model of the labor market in our baseline model with the search and matching framework of Mortensen and Pissarides (1994) and, more recently, Hall (2005a,b,c) and Shimer (2005a,b). We integrate the framework into our environment -which includes capital and monetary factors -following the GST strategy implemented in Christiano, Ilut, Motto, and Rostagno (2007).…”

Section: Introducing Employment Frictions Into the Modelmentioning

confidence: 99%

See 1 more Smart Citation

Introducing Financial Frictions and Unemployment into a Small Open Economy Model

2010

View full text Add to dashboard Cite

The current …nancial crisis has made it abundantly clear that business cycle modeling no longer can abstract from …nancial factors. It is also becoming increasingly clear that the stylized modeling of labor markets without explicit unemployment that is the current standard approach has its limitations. Some questions which the dominating extant business cycle models are mute on, but that we would like to answer are: How important are …nancial and labor market frictions for the business cycle dynamics of a small open economy? In particular, what are the quantitative e¤ects of …nancial factors on output and in ‡ation, and how do they interact with monetary policy? What drives the variation in the intensive and extensive margin of labor supply respectively? What is the estimated Frisch elasticity in a model that allows for both an intensive and an extensive margin of labor supply? In order to address these questions we extend what is becoming the standard new Keynesian model in three important dimensions. First, we incorporate …nancial frictions in the accumulation and management of capital. Second, we model the labor market using a search and matching framework. Third, we extend the model into a small open economy setting. We make a theoretical contribution by incorporating endogenous job separation in this rich framework. Finally, we estimate the full model using Bayesian techniques and illustrate the importance of the various frictions.

show abstract

Section: Introductionmentioning

confidence: 99%

Section: Introducing Employment Frictions Into the Modelmentioning

confidence: 99%

Introducing Financial Frictions and Unemployment into a Small Open Economy Model

2010

View full text Add to dashboard Cite

show abstract

“…When we denote the value of a job for an employed worker, we use the notation E (E) to indicate that a worker is employed in a low (high) productivity job. Likewise, J (J) denotes the value of a low (high) 15 Even though endogenous separations in the presence of stochastic match surplus is an important determinant of labor market dynamics (see amongst others Mortensen and Pissarides (1994) and Bils, Chang, and Kim (2011)), we aim to make the point in this paper under exogenous separations.…”

Section: Environmentmentioning

confidence: 99%

Unemployment cycles

Lindenlaub¹,

Eeckhout²

2015

View full text Add to dashboard Cite

The labor market by itself can create cyclical outcomes, even in the absence of exogenous shocks.We propose a theory that shows that the search behavior of the employed has profound aggregate implications for the unemployed. There is a strategic complementarity between active on-the-job search and vacancy posting by firms: active search changes the number of searchers and the duration of a job, and in the presence of sorting, it improves the quality of the pool of searchers. More vacancy posting in turn makes costly on-the-job search more attractive, a self-fulfilling belief. The absence of on-the-job search discourages vacancy posting, rendering costly on-the-job search unattractive.This model of multiple equilibria can account for large fluctuations in vacancies, unemployment, and job-to-job transitions; it provides a rationale for the Jobless Recovery through a novel channel of the employed searchers crowding out the unemployed; and it gives rise to a shift in the Beveridge Curve (the unemployment-vacancy locus). Each of these phenomena is matched in the data.

show abstract

“…Boeri and Garibaldi (2007) and Bosch and Esteban-Pretel (2009) suggest theoretical frameworks that relax the latter two hypotheses and predict how the level of (in)formality of workers relates to the business cycle. Both are based on extensions of the matching model proposed by Mortensen and Pissarides (1994), to which an informal sector is added. The papers show predictions that are compatible with Brazilian labour market facts.…”

Section: Related Literaturementioning

confidence: 99%

Economic expansion and increase in labout market formality: a poaching approach

Corseuil¹,

Foguel²

2012

Rev. Bras. Econ.

View full text Add to dashboard Cite

This paper investigates the relationship between economic expansion and the degree of formalization for the Brazilian labour market in the recent period. We present a theoretical framework that attempts to explain this relationship through the dynamics of firms hiring strategies. The main predictions are: the share of formal employment rises as the unemployment rate falls, and that the formal-informal wage gap increases, at least at the beginning of the economic expansion. In the empirical part, we use longitudinal microdata from a Brazilian household survey to check whether these two predictions are confirmed. To a large extent our results corroborate both predictions

show abstract

Job Creation and Job Destruction in the Theory of Unemployment

Cited by 2,927 publications

References 9 publications

Introducing Financial Frictions and Unemployment into a Small Open Economy Model

Introducing Financial Frictions and Unemployment into a Small Open Economy Model

Unemployment cycles

Economic expansion and increase in labout market formality: a poaching approach

Contact Info

Product

Resources

About