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Estimation of General Equilibrium Labor Market Search Models

Objective

"My proposal deals with the estimation of Dynamic Stochastic General Equilibrium models with important heterogeneity at the level of firms and households and frictions in the labor market. In the estimation I will exploit mixed frequency data (monthly, quarterly and annual) available in different countries. I will also efficiently take care of possible missing values in the data. This might require developing new estimation techniques. The contribution of the project will be in dealing with important empirically relevant questions. I will address issues that lie at the boundaries between labour economics, business cycle analysis, monetary economics, finance, and growth. In particular I will answer the following questions:

1. How are business cycle costs distributed across different individuals? How costly is involuntary unemployment?
2. Which view best characterizes the process of technology adoption at business cycle frequencies? In particular does Schumpeterian creative destruction play a role in characterizing the adoption of new technologies over the business cycle?
3. What are the welfare costs of the search inefficiencies present in the process of worker reallocation over the business cycle?
4. What are the sources of business cycle fluctuations? And in particular are technology shocks an important driving force?
5. What are the contribution of the job separation rate and the importance of the intensive margin relative to the extensive margin in characterizing aggregate labor market fluctuations?
6. What are the main differences in the cyclical properties of the labor market across the OECD? And which institutions explain these differences?
7. What are the effects of financial sector shocks? And why has the Beveridge curve shifted during the last world wide recession?
8. How policy should respond to the large variation in unemployment risk that individual workers face over their life cycle?"

Field of science

  • /social sciences/sociology/social issues/unemployment
  • /social sciences/economics and business/economics
  • /social sciences/economics and business/business and management/employment
  • /social sciences/economics and business/business and management/commerce

Call for proposal

ERC-2011-ADG_20110406
See other projects for this call

Funding Scheme

ERC-AG - ERC Advanced Grant

Host institution

Istituto Einaudi per l'Economia e la Finanza
Address
Via Sallustiana 62
00187 Roma
Italy
Activity type
Research Organisations
EU contribution
€ 1 033 771,70
Principal investigator
Claudio Michelacci (Prof.)
Administrative Contact
Marco Pagano (Mr.)

Beneficiaries (2)

Istituto Einaudi per l'Economia e la Finanza
Italy
EU contribution
€ 1 033 771,70
Address
Via Sallustiana 62
00187 Roma
Activity type
Research Organisations
Principal investigator
Claudio Michelacci (Prof.)
Administrative Contact
Marco Pagano (Mr.)
FUNDACION CENTRO DE ESTUDIOS MONETARIOS Y FINANCIEROS

Participation ended

Spain
EU contribution
€ 625 397,30
Address
Casado Del Alisal 5
28014 Madrid
Activity type
Research Organisations
Administrative Contact
Gema Salazar (Ms.)