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1 octobre 2010
- handle: 10670/1.u7y5ff
- hal: hal-00516832
- doi: 10.1016/j.red.2010.05.001
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info:eu-repo/semantics/altIdentifier/doi/10.1016/j.red.2010.05.001
info:eu-repo/semantics/OpenAccess
Mots-clés
Business cycle costs Unemployment dynamics Matching E - Macroeconomics and Monetary Economics/E.E3 - Prices, Business Fluctuations, and Cycles/E.E3.E32 - Business Fluctuations • Cycles J - Labor and Demographic Economics/J.J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers/J.J6.J64 - Unemployment: Models, Duration, Incidence, and Job SearchSujets proches
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Jean-Olivier Hairault et al., « Matching frictions, unemployment dynamics and the cost of business cycles », HAL-SHS : économie et finance, ID : 10.1016/j.red.2010.05.001
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Résumé
We investigate the welfare cost of business cycles implied by matching frictions. First, using the reduced-form of the matching model, we show that job finding rate fluctuations generate intrinsically a non-linear effect on unemployment: positive shocks reduce unemployment less than negative shocks increase it. For the observed process of the job finding rate in the US economy, this intrinsic asymmetry increases average unemployment, which leads to substantial business cycles costs. Moreover, the structural matching model embeds other non-linearities, which alter the average job finding rate and consequently the welfare cost of business cycles. Our theory suggests to subsidizing employment in order to dampen the impact of the job finding rate fluctuations on welfare.