Shopping Externalities and Self-Fulfilling Unemployment Fluctuations

• 成果类型: Article
• 署名作者: Kaplan, Greg; Menzio, Guido
• 署名单位: Princeton University; National Bureau of Economic Research; University of Pennsylvania
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/685909
• 发表日期: 2016
• 页码: 771-825
• 关键词: equilibrium unemployment; business cycles; search; consumption; prices; job; expectations; MODEL

摘要

We propose a theory of self-fulfilling unemployment fluctuations. When a firm increases its workforce, it raises demand and weakens competition facing other firms, as employed workers spend more and have less time to search for low prices than unemployed workers. These effects induce other firms to hire more labor in order to scale up their presence in the product market. The feedback between employment and product market conditions generates multiple equilibriaand the possibility of self-fulfilling fluctuationsif differences in shopping behavior between employed and unemployed are large enough. Evidence on spending, shopping, and prices suggests that this is the case.