Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28388
Authors: 
van Roye, Björn
Wesselbaum, Dennis
Year of Publication: 
2009
Series/Report no.: 
Kiel Working Paper 1561
Abstract: 
We implement capital in an endogenous separations New Keynesian matching model. In contrast to the vintage capital theory, we suggest a more general approach, such that workers have unrestricted access to a proportional share of the capital stock. We find that the introduction of capital generates an important channel for the transmission of aggregate productivity shocks, using capital-labor trade-off. The model generates higher volatilities of key variables and therefore enhances the performance of the matching model to generate stylized facts in response to an aggregate productivity shock. However, there is almost no difference for monetary policy shocks.
Subjects: 
Capital
Endogenous Separations
Search and Matching
JEL: 
E22
E32
J64
Document Type: 
Working Paper

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