Instability and Indeterminacy in a Simple Search and Matching Model

14 Pages Posted: 16 Dec 2012

See all articles by Michael U. Krause

Michael U. Krause

University of Cologne

Thomas Lubik

Federal Reserve Banks - Federal Reserve Bank of Richmond

Multiple version iconThere are 2 versions of this paper

Date Written: 2010

Abstract

We demonstrate the possibility of indeterminacy and nonexistence of equilibrium dynamics in a standard business cycle model with search and matching frictions in the labor market. Our results arise for empirically plausible parameterizations and do not rely on a mechanism such as increasing returns.

Suggested Citation

Krause, Michael U. and Lubik, Thomas, Instability and Indeterminacy in a Simple Search and Matching Model (2010). FRB Richmond Economic Quarterly, vol. 96, no. 3, Third Quarter 2010, pp. 259-272. Available at SSRN: https://ssrn.com/abstract=2189108

Michael U. Krause

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Thomas Lubik (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

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