Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250530 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14869
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper develops and estimates a fully microfounded equilibrium business cycle model of the US labor market with aggregate productivity shocks. Those microfoundations are consistent with evidence regarding the underlying distribution of firm growth rates across firms [by age and size] and, when aggregated, are consistent with macro-evidence regarding gross job creation and job destruction flows over the cycle. By additionally incorporating on-the-job search, we systematically characterise the stochastic relationships between aggregate job creation and job destruction flows across firms, gross hire and quit flows [churning] by workers across firms, as well as the persistence and volatility of unemployment and worker job finding rates over the cycle.
Subjects: 
business cycle
firm dynamics
job search
JEL: 
E24
E32
J62
J63
Document Type: 
Working Paper

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