Handbook of Labor Economics, Vol. 4, No. Suppl PA, 2011
Chapter 7Search in Macroeconomic Models of the Labor Market
This chapter assesses how models with search frictions have shaped our understanding of aggregate labor market outcomes in two contexts: business cycle fluctuations and long-run (trend) changes. We first consolidate data on aggregate labor market outcomes for a large set of OECD countries. We then ask how models with search improve our understanding of these data. Our results are mixed. Search models are useful for interpreting the behavior of some ...