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Endogenous separations in a matching model

By Andrew Newell and James Symons


The paper develops a model in which employment is an enduring rent-sharing relationship. In each period rents are subject to a transient disturbance, and the parties weigh the future stream of benefits against current dis-benefits. The analysis suggests a strong correlation between real interest rates and aggregate unemployment because high real interest rates makes the employment relationship more fragile. This correlation is demonstrated for a number of time series of aggregate national data

Topics: HD Industries. Land use. Labor
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Year: 1991
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Provided by: LSE Research Online
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