Abstract
We construct and estimate a business cycle model with search and matching frictions in the labor market and in the product market. We show that the dynamic structure of the model and the endogenous job separation rate are important to accurately represent the empirical responses to the technology and the demand shocks. Our main finding is that the demand shock explains at least 58% of the unemployment fluctuations in the US, while the technology shock accounts for the residual.
| Original language | English |
|---|---|
| Article number | 105527 |
| Number of pages | 16 |
| Journal | Economic Modelling |
| Volume | 101 |
| Issue number | 105527 |
| Early online date | 4 May 2021 |
| DOIs | |
| Publication status | Published - Aug 2021 |
Bibliographical note
Funding Information:This work was supported by the Polish National Science Center ( Narodowe Centrum Nauki ) grant no. 2014/15/N/HS4/01342 .
Publisher Copyright:
© 2021
Research Groups and Themes
- ECON Macroeconomics
Keywords
- technology shocks
- demand shocks
- unemployment
- business cycles
Access to Document
- Full-text PDF (accepted author manuscript)
This is the accepted author manuscript (AAM). The final published version (version of record) is available online via Elsevier at 10.1016/j.econmod.2021.105527. Please refer to any applicable terms of use of the publisher.