Coles, M and Kelishomi, AM (2015) Do Job Destruction Shocks Matter in the Theory of Unemployment? Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester. (Unpublished)
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Abstract
The current DMP approach to labor markets presumes job destruction shocks are small. We relax that assumption and also allow un lled jobs, like unemployment, to evolve as a state variable. Calibrating an otherwise standard DMP framework, we identify a remarkable, (almost) perfect, fit of the empirical facts as reported in Shimer (2005, 2012). The results, how- ever, are also consistent with the insights of Davis and Haltiwanger (1992): that unemployment volatility is driven by large but infrequent job separation shocks. The approach not only provides an important synthesis of two litera- tures which, in other contexts, have appeared contradictory, it also identfies a more traditional view of the timing and progression of recessions.
| Item Type: | Monograph (Working Paper) |
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| Subjects: | H Social Sciences > HB Economic Theory |
| Divisions: | Faculty of Social Sciences > Economics, Department of |
| Depositing User: | Jim Jamieson |
| Date Deposited: | 30 Jul 2015 15:01 |
| Last Modified: | 16 Jan 2019 11:15 |
| URI: | http://repository.essex.ac.uk/id/eprint/14462 |
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