Dataset Information

Volatile hiring: uncertainty in search and matching models.

ABSTRACT: In search-and-matching models, the nonlinear nature of search frictions increases average unemployment rates during periods with higher volatility. These frictions are not, however, by themselves sufficient to raise unemployment following an increase in perceived uncertainty; though they may do so in conjunction with the common assumption of wages being determined by Nash bargaining. Importantly, option-value considerations play no role in the standard model with free entry. In contrast, when the mass of entrepreneurs is finite and there is heterogeneity in firm-specific productivity, a rise in perceived uncertainty robustly increases the option value of waiting and reduces job creation.

SUBMITTER: Den Haan WJ

PROVIDER: S-EPMC8547261 | biostudies-literature | 2021 Oct

REPOSITORIES: biostudies-literature

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Publications

Volatile hiring: uncertainty in search and matching models.

Den Haan Wouter J WJ Freund Lukas B LB Rendahl Pontus P

Journal of monetary economics 20211001

In search-and-matching models, the nonlinear nature of search frictions increases average unemployment rates during periods with higher volatility. These frictions are not, however, by themselves sufficient to raise unemployment following an increase in <i>perceived</i> uncertainty; though they may do so in conjunction with the common assumption of wages being determined by Nash bargaining. Importantly, option-value considerations play no role in the standard model with free entry. In contrast, ...[more]

PMID: 34720337

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Dataset Information

Volatile hiring: uncertainty in search and matching models.

Publications

Volatile hiring: uncertainty in search and matching models.

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