Instability and Indeterminacy in a Simple Search and Matching Model

Krause, Michael U.; Lubik, Thomas

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Instability and Indeterminacy in a Simple Search and Matching Model

FRB Richmond Economic Quarterly, vol. 96, no. 3, Third Quarter 2010, pp. 259-272

14 Pages Posted: 16 Dec 2012

See all articles by Michael U. Krause

Thomas Lubik

Federal Reserve Banks - Federal Reserve Bank of Richmond

There are 2 versions of this paper

Date Written: 2010

Abstract

We demonstrate the possibility of indeterminacy and nonexistence of equilibrium dynamics in a standard business cycle model with search and matching frictions in the labor market. Our results arise for empirically plausible parameterizations and do not rely on a mechanism such as increasing returns.

Suggested Citation: Suggested Citation

Krause, Michael U. and Lubik, Thomas, Instability and Indeterminacy in a Simple Search and Matching Model (2010). FRB Richmond Economic Quarterly, vol. 96, no. 3, Third Quarter 2010, pp. 259-272, Available at SSRN: https://ssrn.com/abstract=2189108