Replication data for: The Fundamental Surplus

Principal Investigator(s):  View help for Principal Investigator(s) Lars Ljungqvist; Thomas J. Sargent

Version:  View help for Version V1

Name File Type Size Last Modified
Compute_A_target_u.m text/plain 2.5 KB 10/11/2019 11:44:PM
Figure_1.m text/x-fortran 2.4 KB 10/11/2019 11:44:PM
Figure_1a.eps application/postscript 13.1 KB 10/11/2019 11:44:PM
Figure_1b.eps application/postscript 12.6 KB 10/11/2019 11:44:PM
Figure_2.eps application/postscript 9.6 KB 10/11/2019 11:44:PM
Figure_2.m text/plain 1012 bytes 10/11/2019 11:44:PM
Figure_3.m text/plain 1.2 KB 10/11/2019 11:44:PM
Figure_3a.eps application/postscript 19.3 KB 10/11/2019 11:44:PM
Figure_3b.eps application/postscript 21.6 KB 10/11/2019 11:44:PM
Y_vary_final.m text/x-fortran 2.1 KB 10/11/2019 11:44:PM

Project Description

Summary:  View help for Summary To generate big responses of unemployment to productivity changes, researchers have reconfigured matching models in various ways: by elevating the utility of leisure, by making wages sticky, by assuming alternating-offer wage bargaining, by introducing costly acquisition of credit, by assuming fixed matching costs, or by positing government-mandated unemployment compensation and layoff costs. All of these redesigned matching models increase responses of unemployment to movements in productivity by diminishing the fundamental surplus fraction, an upper bound on the fraction of a job's output that the invisible hand can allocate to vacancy creation. Business cycles and welfare state dynamics of an entire class of reconfigured matching models all operate through this common channel.

Scope of Project

JEL Classification:  View help for JEL Classification
      E23 Macroeconomics: Production
      E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      E32 Business Fluctuations; Cycles
      J24 Human Capital; Skills; Occupational Choice; Labor Productivity
      J31 Wage Level and Structure; Wage Differentials
      J41 Labor Contracts
      J63 Labor Turnover; Vacancies; Layoffs


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Published Versions

V1 [2019-10-12]

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