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.

Colciago, A., Fasani, S., Rossi, L. (2020). Unemployment, Firm Dynamics, and the Business Cycle, [Working paper] [10.2139/ssrn.3724244].

Unemployment, Firm Dynamics, and the Business Cycle,

Colciago A
Primo
;
2020

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.
Working paper
Scientifica
Entry, Unemployment, Bayesian Analysis, Search and Matching;
English
Colciago, A., Fasani, S., Rossi, L. (2020). Unemployment, Firm Dynamics, and the Business Cycle, [Working paper] [10.2139/ssrn.3724244].
Colciago, A; Fasani, S; Rossi, L
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/298993
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