Matching Efficiency and Business Cycle Fluctuations

CAMA Working Paper No. 34/2012

35 Pages Posted: 12 Jul 2012

See all articles by Francesco Furlanetto

Francesco Furlanetto

affiliation not provided to SSRN

Nicolas Groshenny

Reserve Bank of New Zealand; Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA)

Date Written: July 2012

Abstract

A large decline in the efficiency of the US labor market in matching unemployed workers and vacant jobs has been documented during the Great Recession. We use a simple New Keynesian model with search and matching frictions in the labor market to study the macroeconomic implications of matching efficiency shocks. We show that the propagation of these disturbances and their importance for business cycle fluctuations depend crucially on the form of hiring costs and on the presence of nominal rigidities.

Suggested Citation

Furlanetto, Francesco and Groshenny, Nicolas, Matching Efficiency and Business Cycle Fluctuations (July 2012). CAMA Working Paper No. 34/2012, Available at SSRN: https://ssrn.com/abstract=2103974 or http://dx.doi.org/10.2139/ssrn.2103974

Francesco Furlanetto

affiliation not provided to SSRN ( email )

Nicolas Groshenny (Contact Author)

Reserve Bank of New Zealand ( email )

6011

Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA)

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

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