Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86786
Authors: 
Willems, Tim
Year of Publication: 
2010
Series/Report no.: 
Tinbergen Institute Discussion Paper 10-098/2
Abstract: 
Recent research has shown that the standard labor matching model hasdifficulties in reproducing the co-movement patterns observed in US data. Thisis due to the fact that the standard model lacks sufficient propagation of shocks.This paper shows that refining the informational structure of the model leadsto improvements along this dimension: when agents cannot separately identifypersistent and transitory technology shocks on impact (so that they must solvea signal extraction problem), shocks are propagated. Under this specificationthe standard matching model even manages to make recoveries initially jobless,as in the data.
Subjects: 
imperfect information
labor market matching
signal extraction
jobless growth
JEL: 
D80
E32
J63
J64
Document Type: 
Working Paper

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