Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142336
Authors: 
Vasilev, Aleksandar
Year of Publication: 
2016
Abstract: 
In this paper we investigate the quantitative importance of search and matching fric- tions in Bulgarian labor markets. This is done by augmenting an otherwise standard real business cycle model a la Long and Plosser (1983) with both a two-sided costly search and fiscal policy. This introduces a strong propagation mechanism that allows the model to capture the business cycles in Bulgaria better than earlier models. The model performs well vis-a-vis data, especially along the labor market dimension, and in addition dominates the market-clearing labor market framework featured in the stan- dard RBC model, e.g Vasilev (2009), as well as the indivisible labor extension used in Hansen (1985).
Subjects: 
general equilibrium
unemployment and wages
business cycles
fiscal policy
JEL: 
D51
E24
E32
J40
Document Type: 
Preprint

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