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Gabriele Cardullo
''Equilibrium in Matching Models with Employment Dependent Productivity''
( 2009, Vol. 29 No.3 )
In a standard search and matching framework, the labor market presents frictions while in the competitive product market the demand is infinitely elastic.To have a more realistic framework, some models abandon the assumption of infinite elasticity and consider a two-tier productive scheme in the goods market. In this paper, I establish the conditions that are sufficient for the existence and the uniqueness of a steady-state equilibrium for this kind of models. I also notice that some standard assumptions about the production and matching technology (a Cobb-Douglas function) do not fulfill such conditions and so may hinder the existence of an equilibrium.
Keywords: Unemployment, search-matching equilibrium.
JEL: J6 - Mobility, Unemployment, and Vacancies: General
Manuscript Received : Apr 29 2009 Manuscript Accepted : Sep 18 2009

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