Front Matter Page
Research Department
Authorized for distribution by Abdul de Guia Abiad
Contents
I. Introduction
II. Related Literature
III. The prototype real business cycle model
IV. Introducing Search Frictions and Employment Fluctuations
A. Households
B. Firms
C. Employment Contract and the Nash Bargaining
D. Equilibrium
E. The Wage Determination
F. The labor wedge
V. Results
A. Mapping the Models to the U.S. data
B. Mapping with the simulated data
VI. Conclusion
Appendices
1. Appendix 1
1. Data
2. Appendix 2
1. Households’ Decision Problem
2. Firms’ Decision Problem
3. Details of Employment Contract
References
Tables
1. Moments and Correlations: High Frisch Elasticity
2. Moments and Correlations: Low Frisch Elasticity
3. Simulation Exercise
Figures
1. Labor Wedge in the RBC Model
2. Total Hours: Extensive vs. Intensive Margin
3. The MRS and MPL in the Prototype Model
4. Prototype vs. Search Model: Low Frequency
5. Prototype vs. Search Model: Business Cycle Frequency
6. Prototype vs. Search Model: Low Frequancy and low Frisch Elasticity
7. Prototype vs. Search Model: Business Cycle Frequency and Low Frisch Elasticity
8. Simulated Data: Labor Wedge and Output