Abstract
For a search-theoretic model of the labor market, we seek conditions for the existence of a balanced growth path (BGP), where unemployment, vacancy, and worker’s transitions rates remain constant in the face of improvements in the production and search technologies. A BGP exists iff firm-worker matches are inspection goods and the quality of a match is drawn from a Pareto distribution. Declining search frictions contribute to growth with an intensity determined by the tail coefficient of the Pareto distribution. We develop a strategy to measure the rate of decline of search frictions and their contribution to growth.
Original language | English (US) |
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Pages (from-to) | 4387-4437 |
Number of pages | 51 |
Journal | Journal of Political Economy |
Volume | 128 |
Issue number | 12 |
DOIs | |
State | Published - Dec 2020 |
ASJC Scopus subject areas
- Economics and Econometrics