The Benchmark Macroeconomic Models of the Labour Market

Authors

  • Gaetano Lisi Creativity and Motivations (CreaM) Economic Research Centre

Keywords:

Matching and Job Search Theory, “non-walrasian” Labour Market, Search and Matching frictions, Job Creation and Job Destruction, Equilibrium Unemployment

Abstract

This technical note aims to provide a practical overview of the labour market’s benchmark macroeconomic models. The matching models are the primary and most popular theoretical tools used by economists to evaluate various labour market policies and to study the problem of unemployment. These models explain the co-existence in equilibrium of unemployment and vacancies through frictions in matching workers and firms and generate predictions that have the right direction: unemployment goes up in recession and down in boom, while job vacancies shift in the opposite direction. The central role of these models in imperfect labour markets has recently been confirmed by the 2010 Nobel Prize for economy awarded to the founders of this approach: Peter Diamond, Dale Mortensen and Christopher Pissarides.

Author Biography

Gaetano Lisi, Creativity and Motivations (CreaM) Economic Research Centre

Department of Economics and Law, University of Cassino and Southern Lazio, Italy.

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Published

2013-07-01

How to Cite

Lisi, G. (2013). The Benchmark Macroeconomic Models of the Labour Market. International Journal of Economic Practices and Theories, 3(3), 168-185. Retrieved from http://ijept.eu/index.php/ijept/article/view/The_Benchmark_Macroeconomic_Models_of_the_Labour_Market

Issue

Vol. 3 No. 3 (2013)

Section

Articles

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