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• W2733223054 abstract "We amend the canonical matching model by assuming diminishing returns to labor. We put the model to the twin test of generating a high volatility of labor market variables in response to productivity shocks (the “Shimer puzzle”) and a moderate response to changes in unemployment benefits and find that it passes that test. It does not feature wage rigidity, nor is it based on a small surplus calibration. Diminishing returns introduce a distinction between marginal and average surplus. With a standard (large average surplus) calibration, we can have a small marginal surplus, and thus a strong response of hiring to productivity shocks, while obtaining a measured response of unemployment to changes in benefits." @default.
• W2733223054 created "2017-07-14" @default.
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• W2733223054 date "2018-12-01" @default.
• W2733223054 modified "2023-09-30" @default.
• W2733223054 title "DIMINISHING RETURNS AND LABOR MARKET ADJUSTMENTS" @default.
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• W2733223054 doi "https://doi.org/10.1017/s1365100516001012" @default.
• W2733223054 hasPublicationYear "2018" @default.
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