The fundamental surplus strikes again

Lars Ljungqvist, Thomas J. Sargent

    Research output: Contribution to journalArticlepeer-review


    The fundamental surplus isolates parameters that determine how sensitively unemployment responds to productivity shocks in the matching models of Christiano et al. (2016 and this issue) under either Nash bargaining or alternating-offer bargaining. Those models thus join a collection of models in which diverse forces are intermediated through the fundamental surplus.

    Original languageEnglish (US)
    Pages (from-to)38-51
    Number of pages14
    JournalReview of Economic Dynamics
    StatePublished - Jul 2021


    • Alternating offer bargaining
    • Business cycle
    • DSGE
    • Fundamental surplus
    • Matching model
    • Unemployment

    ASJC Scopus subject areas

    • Economics and Econometrics


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