Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/95708 
Year of Publication: 
2014
Series/Report no.: 
Bank of Canada Working Paper No. 2014-9
Publisher: 
Bank of Canada, Ottawa
Abstract: 
We incorporate a participation decision in a standard New Keynesian model with matching frictions and show that treating the labor force as constant leads to incorrect evaluation of alternative policies. We also show that the presence of a participation margin mitigates the Shimer critique.
Subjects: 
Labour markets
Business fluctuations and cycles
Transmission of monetary policy
JEL: 
E24
E32
E52
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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