Labor Market Fluctuations in the Small and in the Large / Richard Rogerson, Lodewijk P. Visschers, Randall Wright.

Format:

Book

Author/Creator:

Rogerson, Richard.

Contributor:

National Bureau of Economic Research.

Visschers, Lodewijk P.

Wright, Randall.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13872.

NBER working paper series no. w13872

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

Shimer's calibrated version of the Mortensen-Pissarides model generates unemployment fluctuates much smaller than the data. Hagedorn and Manovskii present an alternative calibration that yields fluctuations consistent with the data, but this has been challenged by Costain and Reiter, who say it generates unrealistically big differences in unemployment from the differences in policy we sees across countries. We argue this concern may be unwarranted, because one cannot assume elasticities relevant for small changes work for large changes. Models with fixed factors in market or household production can generate large effects from small changes and reasonable effects from large changes. This is reminiscent of attempts to improve the labor market in the Kydland-Prescott model, especially ones incorporating household production, like Benhabib, Rogerson and Wright.

Notes:

Print version record

March 2008.