Long Live the Vacancy

Haefke, Christian and Reiter, MichaelORCID: https://orcid.org/0000-0001-9490-8746 (September 2020) Long Live the Vacancy. IHS Working Paper Series 22, 44 p.

Available under License Creative Commons Attribution.

Download (628kB) | Preview
[img] Other (not available to the public)
Restricted to repository staff only

Download (614kB)


We reassess the role of vacancies in a Diamond-Mortensen-Pissarides style search and matching model. In the absence of free entry long lived vacancies and endogenous separations give rise to a vacancy depletion channel which we identify via joint unemployment and vacancy dynamics. We show conditions for constrained efficiency and discuss important implications of vacancy longevity for modeling and calibration, in particular regarding match cyclicality and wages. When calibrated to the postwar US economy, the model explains not only standard deviations and autocorrelations of labor market variables, but also their dynamic correlations with only one shock.

Item Type: IHS Series
Keywords: Beveridge Curve, Business Cycles, Job Destruction, Random Matching, Separations, Unemployment Volatility, Wage Determination
Classification Codes (e.g. JEL): E24, E32, J63, J64
Research Units: Former Research Units (until 2020) > Macroeconomics and Economic Policy
Date Deposited: 03 Sep 2020 07:41
Last Modified: 14 Jun 2024 11:03
URI: https://irihs.ihs.ac.at/id/eprint/5419

Actions (login required)

View Item View Item