Please use this identifier to cite or link to this item: https://hdl.handle.net/2440/103700
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Type: Journal article
Title: Mismatch shocks and unemployment during the great recession
Author: Furlanetto, F.
Groshenny, N.
Citation: Journal of Applied Econometrics, 2016; 31(7):1197-1214
Publisher: Wiley
Issue Date: 2016
ISSN: 0883-7252
1099-1255
Statement of
Responsibility: 
Francesco Furlanetto, and Nicolas Groshenny
Abstract: We investigate the macroeconomic consequences of .uctuations in the effectiveness of the labor-market matching process with a focus on the Great Recession. We conduct our analysis in the context of an estimated medium-scale DSGE model with sticky prices and equilibrium search unemployment that features a shock to the matching efficiency (or mismatch shock). We find that this shock is almost irrelevant for unemployment fluctuations in normal times. However, it plays a somewhat larger role during the Great Recession when it contributes to raise the actual unemployment rate by 1.25 percentage points and the natural rate by 2 percentage points. Moreover, it is the only shock that generates a positive conditional correlation between unemployment and vacancies.
Keywords: Search and matching frictions
Unemployment
Natural rates.
Rights: Copyright © 2016 John Wiley & Sons, Ltd.
DOI: 10.1002/jae.2498
Appears in Collections:Aurora harvest 7
Economics publications

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