A Monetary Model of Business Cycle with Search on the Labor Market.

Abstract

This paper studies the cyclical labor market properties of a model which can account for the Phillips and Beveridge curves. Monopolistic competition and sticky prices on the good market are introduced in a labor market search model disturbed both by technological and money supply shocks. We explain the specific propagation mechanisms on the labor market related to money supply shocks and show that they are quantitatively relevant.UNEMPLOYMENT ; BUSINESS CYCLES ; PRICES