Technology-Policy Interaction in Frictional Labor Markets

2006 ◽  
Author(s):  
Andreas Hornstein ◽  
Per L. Krusell ◽  
Giovanni L. Violante
Keyword(s):  
Labor Markets ◽  
Technology Policy ◽  
Policy Interaction ◽  
Frictional Labor Markets

scholarly journals Tax Smoothing in Frictional Labor Markets

2012 ◽  
Vol 120 (5) ◽  
pp. 926-985 ◽  
Author(s):  
David M. Arseneau ◽  
Sanjay K. Chugh
Keyword(s):  
Labor Markets ◽  
Tax Smoothing ◽  
Frictional Labor Markets

EFFICIENT SORTING IN FRICTIONAL LABOR MARKETS WITH TWO-SIDED HETEROGENEITY

2014 ◽  
Vol 20 (1) ◽  
pp. 95-119 ◽  
Author(s):  
Luca Paolo Merlino
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
High Technology ◽  
Relative Strength ◽  
Wage Bargaining ◽  
Pigouvian Tax ◽  
Skilled Workers ◽  
Frictional Labor Markets ◽  
Do So ◽  
Search Externalities

This paper studies how search externalities and wage bargaining distort vacancy creation and the allocation of workers to jobs in markets with two-sided heterogeneity. To do so, I propose a model of a frictional labor market where heterogeneous workers decide which job to look for and firms decide which technology to adopt. At equilibrium, there is perfect segmentation across sectors, which is determined by a unique threshold of workers' productivity. This threshold is inefficient because of participation and composition externalities. The Pigouvian tax scheme that decentralizes optimal sorting shows that these externalities have opposite signs. Furthermore, their relative strength depends on the distribution of workers' skills, so that when there are many (few) skilled workers, too many (few) high-technology jobs are created.

RETHINKING OPTIMAL EXCHANGE RATE REGIMES WITH FRICTIONAL LABOR MARKETS

2014 ◽  
Vol 19 (5) ◽  
pp. 1116-1147 ◽  
Author(s):  
Alessia Campolmi ◽  
Ester Faia
Keyword(s):  
Exchange Rate ◽  
Labor Market ◽  
Labor Markets ◽  
Exchange Rate Regimes ◽  
Optimal Choice ◽  
Labor Market Institutions ◽  
Labor Costs ◽  
Exchange Rate Dynamics ◽  
Labor Market Dynamics ◽  
Frictional Labor Markets

Currency fluctuations are an important determinant of labor market dynamics. Vice versa, relative labor costs affect real exchange rate dynamics. The optimal choice of exchange rate regimes cannot neglect this nexus. We assess such a choice using a two-country model with frictional labor markets. The monetary authority faces a tension between the classical insulating property of floating exchange rates and the destabilizing effects of currency fluctuations on (relative) job flows. Results show that the second motive is important: optimal monetary policy prescribes (some) response to the exchange rate. We also reexamine the conditions for optimal policy in a currency area whose members experience asymmetries in labor market institutions.

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