Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210039
Authors: 
Furlanetto, Francesco
Groshenny, Nicolas
Year of Publication: 
2013
Series/Report no.: 
Working Paper 2013/16
Abstract: 
We investigate the macroeconomic consequences of fluctuations 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
Subjects: 
search and matching frictions
unemployment
natural rates
JEL: 
E32
C51
C52
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-769-8
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.no
Document Type: 
Working Paper
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