Instability and Indeterminacy in a Simple Search and Matching Model

36 Pages Posted: 8 Jun 2016

See all articles by Michael U. Krause

Michael U. Krause

University of Cologne

Thomas A. Lubik

Johns Hopkins University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2010

Abstract

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

Keywords: search and matching, indeterminacy, match elasticity

JEL Classification: E24, E32, J64

Suggested Citation

Krause, Michael U. and Lubik, Thomas A., Instability and Indeterminacy in a Simple Search and Matching Model (2010). Bundesbank Series 1 Discussion Paper No. 2010,25. Available at SSRN: https://ssrn.com/abstract=2785389

Michael U. Krause (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Thomas A. Lubik

Johns Hopkins University - Department of Economics ( email )

3400 Charles Street
Baltimore, MD 21218-2685
United States

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