Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247184 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 915
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
We formulate and estimate a business cycle model which can account for key business cycle properties of labor market variables and other aggregates. Three features distinguish our model from the standard model with Search And Matching (SAM) frictions in the labor market: frictional firm entry, endogenous product variety, and investment in two assets: stocks and physical capital. Our model with firm dynamics displays an endogenous form of wage moderation. Thanks to the latter, it outperforms the SAM framework augmented with exogenous real wage rigidities.
Subjects: 
Entry
Unemployment
Bayesian Analysis
Search and Matching
JEL: 
C5
E32
Document Type: 
Working Paper

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