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- Title
Heterogeneity, Job Creation and Unemployment Volatility.
- Authors
Guerrieri, Veronica
- Abstract
In this paper, I explore the impact of match-specific heterogeneity at the job creation margin on business cycle fluctuations. I show that this form of heterogeneity alone does not help to amplify labor market volatility, either under full or under asymmetric information. First, I show analytically that, under full information, heterogeneity has no first-order effect on the response of unemployment and job creation to productivity, and actually tends to dampen the response of market tightness. Then, in a series of calibrations, I show that with both full and asymmetric information, the model delivers labor market volatilities close to the representative-agent, full-information benchmark.
- Subjects
UNEMPLOYMENT; ECONOMIC development; JOB creation; HETEROGENEITY; LABOR market; MARKET volatility; EMPLOYMENT; INFORMATION asymmetry; BUSINESS cycles
- Publication
Scandinavian Journal of Economics, 2007, Vol 109, Issue 4, p667
- ISSN
0347-0520
- Publication type
Article
- DOI
10.1111/j.1467-9442.2007.00516.x