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Heterogeneous Responses to Job Mobility Shocks in a HANK Model with a Frictional Labor Market

Author

Listed:
  • Serdar Birinci
  • Fatih Karahan
  • Yusuf Mercan
  • Kurt See

Abstract

We use a heterogeneous agent New Keynesian model with a frictional labor market featuring on-the-job-search to study how job switching affects consumption decisions for individuals with different wealth levels. We find that an increased job switching rate, driven by an exogenous shift in employed individuals' job search efficiency—acting as a positive future income shock—results in a larger decline in current demand for the wealth rich relative to the wealth poor. This larger consumption reduction for the wealth rich is due to the equilibrium decline in their financial wealth.

Suggested Citation

  • Serdar Birinci & Fatih Karahan & Yusuf Mercan & Kurt See, 2024. "Heterogeneous Responses to Job Mobility Shocks in a HANK Model with a Frictional Labor Market," AEA Papers and Proceedings, American Economic Association, vol. 114, pages 561-566, May.
    • Handle: RePEc:aea:apandp:v:114:y:2024:p:561-66
    DOI: 10.1257/pandp.20241003
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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