Cookies?
Library Header Image
LSE Research Online LSE Library Services

Do matching frictions explain unemployment?: not in bad times

Michaillat, Pascal (2010) Do matching frictions explain unemployment?: not in bad times. CEP discussion papers, CEPDP1024. London School of Economics and Political Science, London, UK.

Full text not available from this repository.
Identification Number: CEPDP1024

Abstract

This paper models unemployment as the result of matching frictions and job rationing. Job rationing is a shortage of jobs arising naturally in an economic equilibrium from the combination of some wage rigidity and diminishing marginal returns to labor. During recessions, job rationing is acute, driving the rise in unemployment, whereas matching frictions contribute little to unemployment. Intuitively, in recessions jobs are lacking, the labor market is slack, recruiting is easy and inexpensive, so matching frictions do not matter much. In a calibrated model, cyclical fluctuations in the composition of unemployment are quantitatively large.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/abstract.as...
Additional Information: © 2009 P. Michaillat
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Series: Working Papers > CEP Discussion Papers
Date Deposited: 13 Apr 2011 15:55
Last Modified: 14 Nov 2012 10:19
URI: http://eprints.lse.ac.uk/id/eprint/35595

Actions (login required)

View Item View Item