Endogenous market structures and labour market dynamics

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Title: Endogenous market structures and labour market dynamics
Author: Colciago, Andrea ; Rossi, Lorenza
Organization: Bank of Finland
Series: Bank of Finland Research Discussion Papers
Series number: 12/2011
Year of publication: 2011
Publication date: 8.4.2011
Pages: 51 s.
Keywords: teknologia; palkat; työllisyys; työttömyys; volatiliteetti; työmarkkinat; mallit; yritykset; markkinat;
Abstract: We propose a flexible prices model where endogenous market structures and search and matching frictions in the labour market interact endogenously. The interplay between firms endogenous entry, strategic interactions among producers and labour market frictions represents a strong amplification channel for technology shocks on labour market variables and helps in addressing the unemployment- volatility puzzle. Consistently with US evidence, new firms create a large fraction of new jobs and grow faster than more mature firms, net entry of firms is procyclical and the price mark-up is countercyclical.
Rights: https://helda.helsinki.fi/bof/copyright


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