Please use this identifier to cite or link to this item:
https://hdl.handle.net/2440/103700
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Type: | Journal article |
Title: | Mismatch shocks and unemployment during the great recession |
Author: | Furlanetto, F. Groshenny, N. |
Citation: | Journal of Applied Econometrics, 2016; 31(7):1197-1214 |
Publisher: | Wiley |
Issue Date: | 2016 |
ISSN: | 0883-7252 1099-1255 |
Statement of Responsibility: | Francesco Furlanetto, and Nicolas Groshenny |
Abstract: | We investigate the macroeconomic consequences of .uctuations in the effectiveness of the labor-market matching process with a focus on the Great Recession. We conduct our analysis in the context of an estimated medium-scale DSGE model with sticky prices and equilibrium search unemployment that features a shock to the matching efficiency (or mismatch shock). We find that this shock is almost irrelevant for unemployment fluctuations in normal times. However, it plays a somewhat larger role during the Great Recession when it contributes to raise the actual unemployment rate by 1.25 percentage points and the natural rate by 2 percentage points. Moreover, it is the only shock that generates a positive conditional correlation between unemployment and vacancies. |
Keywords: | Search and matching frictions Unemployment Natural rates. |
Rights: | Copyright © 2016 John Wiley & Sons, Ltd. |
DOI: | 10.1002/jae.2498 |
Published version: | http://dx.doi.org/10.1002/jae.2498 |
Appears in Collections: | Aurora harvest 7 Economics publications |
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RA_hdl_103700.pdf Restricted Access | Restricted Access | 358.18 kB | Adobe PDF | View/Open |
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