From One to Many Islands: The Emergence of Search and Matching Models

Posted: 5 Jul 2012

See all articles by Anna Batyra

Anna Batyra

Catholic University of Louvain (UCL)

Michel De Vroey

Catholic University of Louvain

Date Written: July 2012

Abstract

The notion of frictional unemployment failed to grow into a full‐fledged theory in the writings of Beveridge, Pigou and Hicks, as these economists were unwilling and/or unable to go beyond the then‐prevailing Marshallian approach. Here, first we make explicit the trade organization assumptions underpinning Marshall's equilibrium theory. Next we examine Beveridge's, Pigou's and Hicks' early works on wages and unemployment. Finally, we look at the seminal papers that paved the way for search literature: McCall, Lucas and Prescott, Mortensen and Pissarides. We show that they succeed in providing an unemployment result, because they indeed depart from the Marshallian trade organization.

Keywords: Marshall, matching, search, supply and demand

JEL Classification: B10, B20, B40, J20, J60

Suggested Citation

Batyra, Anna and De Vroey, Michel, From One to Many Islands: The Emergence of Search and Matching Models (July 2012). Bulletin of Economic Research, Vol. 64, Issue 3, pp. 393-414, 2012. Available at SSRN: https://ssrn.com/abstract=2100683 or http://dx.doi.org/10.1111/j.1467-8586.2010.00389.x

Anna Batyra (Contact Author)

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

Michel De Vroey

Catholic University of Louvain ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

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