Journal of Monetary Economics 2014 DOI: 10.1016/j.jmoneco.2013.10.001 View full text
Petr Sedláček

Abstract: During the last recession, new hires were lower than would be predicted by a standard matching function and the observed ratio of searching workers and firms. This paper first estimates U.S. match efficiency as an exogenous residual in the matching function using a simple search and matching model. It finds match efficiency to be procyclical and to account for about 1/4 of unemployment increases during the most severe recessions. Second, this paper proposes a model with endogenous separations and firing costs …

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