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Business Cycles and Labor Market Flows with Sequential Screening

Author

Listed:
  • Carl E. Walsh

    (UC Santa Cruz)

  • Federico Ravenna

    (HEC Montreal and UC Santa Cruz)

Abstract

We build a business cycle model where employers' screening of heterogeneous workers plays a central role in determining both the flows into and out of unemployment. The model can address how differences between the US and European labor market flows affect business cycle dynamics. It provides a novel and rich environment to study the implications of labor market structure for the goals and constraints faced by central banks and on the optimal design of monetary policy.

Suggested Citation

  • Carl E. Walsh & Federico Ravenna, 2010. "Business Cycles and Labor Market Flows with Sequential Screening," 2010 Meeting Papers 571, Society for Economic Dynamics.
    • Handle: RePEc:red:sed010:571
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    References listed on IDEAS

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