1. Publications
  2. Review of Economic Dynamics, July 2021
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Why is Unemployment so Countercyclical?

We argue that wage inertia plays a pivotal role in allowing empirically plausible variants of the standard search and matching model to account for the large countercyclical response of unemployment to shocks.

15. July 2021

Authors Lawrence J. Christiano Martin S. Eichenbaum Mathias Trabandt

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Keywords

Unemployment wage cyclicality business cycle macroeconomic shocks labor-market volatility

JEL Classification

E00

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Professor Dr Mathias Trabandt
Professor Dr Mathias Trabandt
Economist

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Dr Wolfgang Sender
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