Chapter Questions
What is meant by "search" in models of employment? Why is it a friction?
Explain the relationship between the unemployment rate, labour force participation ratio, and employment/population ratio.
How has the labor force participation rate behaved over time? Do women and men behave similarly with respect to labor force participation?
Is the participation rate procyclical or countercyclical?
How has unemployment in the U.S. changed in the period between 1948 and 2012 ?
How does the vacancy rate behave relative to the unemployment rate, and how does this matter for the Beveridge curve?
In the DMP model, what determines a consumer's decision to search for work?
In the DMP model, what determines a firm's decision to post a vacancy?
What are total surplus, worker surplus, and firm surplus in the DMP model?
In the DMP model, when a worker and firm are matched, what determines the wage paid to the worker?
In the DMP model, what are the effects of an increase in the UI benefit?
In the DMP model, what are the effects of an increase in productivity?
In the DMP model, what are the effects of a decrease in matching efficiency.
What explains the observed Beveridge relation from 2000 to 2012?
What is wage-stickiness and how does it depend on labour bargaining power?
What is the key criticism of the Keynesian search model?