REVISITING THE HYPOTHESIS OF HIGH DISCOUNTS AND HIGH UNEMPLOYMENT

• 成果类型: Article
• 署名作者: Martellini, Paolo; Menzio, Guido; Visschers, Ludo
• 署名单位: New York University; National Bureau of Economic Research; University of Edinburgh
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueaa138
• 发表日期: 2021
• 页码: 2203-2232
• 关键词: life-cycle; search; job; MODEL

摘要

We revisit the hypothesis that cyclical fluctuations in unemployment are caused by shocks to the discount rate. We use a simple but rich search-theoretic model of the labour market in which the UE, EU and EE rates are all endogenous. Analytically, we show that an increase in the discount rate lowers the UE rate and, under some natural conditions, it lowers the EU rate. Quantitatively, we show that an increase in the discount rate from 4% to 10% generates a 3.5% decline in the UE rate and a 6% decline in the EU rate. These findings are at odds with the actual behaviour of the US labour market over the business cycle, which features a negative comovement between the UE and EU rates.