A Congestion Theory of Unemployment Fluctuations
American Economic Journal: Macroeconomics,
We propose a theory of unemployment fluctuations in which newhires and incumbentworkers are imperfect substitutes. Hence, attempts to hire away the unemployed during recessions diminish the marginal product of new hires, discouraging job creation. This single feature achieves a ten-fold increase in the volatility of hiring in an otherwise standard search model, produces a realistic Beveridge curve despite countercyclical separations, and explains 30–40% of U.S. unemployment fluctuations. Additionally, it explains the excess procyclicality of new hires’ wages, the cyclical labor wedge, countercyclical earnings losses from job displacement, and the limited steady-state effects of unemployment insurance.
European Firm Concentration and Aggregate Productivity
Journal of the European Economic Association,
This paper derives a European Herfindahl–Hirschman concentration index from 15 micro-aggregated country datasets. In the last decade, European concentration rose due to a reallocation of economic activity toward large and concentrated industries. Over the same period, productivity gains from an increasing allocative efficiency of the European market accounted for 50% of European productivity growth while markups stayed constant. Using country-industry variation, we show that changes in concentration are positively associated with changes in productivity and allocative efficiency. This holds across most sectors and countries and supports the notion that rising concentration in Europe reflects a more efficient market environment rather than weak competition and rising market power.
Wirtschaft im Wandel
Wirtschaft im Wandel Die Zeitschrift „Wirtschaft im Wandel“ will eine breite...
IWH Medium-Term Projection The IWH medium-term projection shows: If Germany wants to stick to both its current debt...
Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...
IWH-DPE Call for Applications – Fall 2024 Intake
Vacancy IWH-DPE Call for Applications – Fall 2024 Intake ...
PostDoc Position in the Department of Laws, Regulations and Factor Markets (100%) (f/m/x) [2024-02]
Vacancy PostDoc Position (100%) (f/m/x) [2024-02] ...
IWH Alumni The IWH would like to stay in contact with its former employees. We...
Joint Economic Forecast
Joint Economic Forecast The joint economic forecast is an instrument for evaluating...