Journal article


Monetary Persistence and the Labor Market: A New Perspective


Publication Details
Author(s): Merkl C, Lechthaler W, Snower D
Publisher: Elsevier
Publication year: 2010
Volume: 34
Journal issue: 5
Pages range: 968-983
ISSN: 0165-1889
Language: English

Abstract

In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business cycle. The reactions to monetary and real shocks become much more sluggish. Job creation and job destruction are negatively correlated. And the volatility of unemployment is much larger than in the standard search and matching model.



Focus Area of Individual Faculties


How to cite
APA: Merkl, C., Lechthaler, W., & Snower, D. (2010). Monetary Persistence and the Labor Market: A New Perspective. Journal of Economic Dynamics & Control, 34(5), 968-983. https://dx.doi.org/10.1016/j.jedc.2010.01.004

MLA: Merkl, Christian, Wolfgang Lechthaler, and Dennis Snower. "Monetary Persistence and the Labor Market: A New Perspective." Journal of Economic Dynamics & Control 34.5 (2010): 968-983.

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