Abstract
This paper analyses equilibrium unemployment in a model that
combines efficiency wages with search and matching frictions in the
labour market. We express equilibrium unemployment as the sum of a
pure efficiency wage component and a component that reflects search
frictions. Using standard values of calibrated parameters, we argue that
over 85% of equilibrium unemployment is due to effciency wage effects.
combines efficiency wages with search and matching frictions in the
labour market. We express equilibrium unemployment as the sum of a
pure efficiency wage component and a component that reflects search
frictions. Using standard values of calibrated parameters, we argue that
over 85% of equilibrium unemployment is due to effciency wage effects.
| Original language | English |
|---|---|
| Place of Publication | Bath, UK |
| Publisher | Department of Economics, University of Bath |
| Publication status | Published - Oct 2014 |
Publication series
| Name | Bath Economics Research Working Papers |
|---|---|
| Volume | 26/14 |
