Search Results
From Dating to Marriage: Has Online Dating Made a Difference?
Has online dating improved marriage matches? An economic model that examines partner selection shows minimal changes since 2008.
Working Paper
Wage Setting Under Targeted Search
When setting initial compensation some firms set a fixed non-negotiable wage while others bargain. In this paper we propose a parsimonious search and matching model with two sided heterogeneity, where search intensity and the degree of randomness in matching are endogenous, and firms decide whether to bargain or post wages. We study the implications of heterogeneous search costs and market tightness on the choice of the wage setting mechanism, as well as the relationship between bargaining prevalence and wage level, residual wage dispersion, and labor market tightness. We find that bargaining ...
Working Paper
Targeted search in matching markets
We propose a parsimonious matching model where people's choice of whom to meet endogenizes the degree of randomness in matching. The analysis highlights the interaction between a productive motive, driven by the surplus attainable in a match, and a strategic motive, driven by reciprocity of interest of potential matches. We find that the interaction between these two motives differs with preferences ? vertical versus horizontal ? and that this interaction implies that preferences estimated using our model can look markedly different from those estimated using a model where the degree of ...
Working Paper
Wage Setting Under Targeted Search
When setting initial compensation, some firms set a fixed, non-negotiable wage while others bargain. In this paper we propose a parsimonious search and matching model with two sided heterogeneity, where the choice of wage-setting protocol, wages, search intensity, and degree of randomness in matching are endogenous. We find that posting and bargaining coexist as wage-setting protocols if there is sufficient heterogeneity in match quality, search costs, or market tightness and that labor market tightness and relative costs of search play a key role in the choice of the wage-setting mechanism. ...
Working Paper
Wage Setting Under Targeted Search
When setting initial compensation, some firms set a fixed, non-negotiable wage while others bargain. In this paper we propose a parsimonious search and matching model with two sided heterogeneity, where the choice of wage-setting protocol, wages, search intensity, and degree of randomness in matching are endogenous. We find that posting and bargaining coexist as wage-setting protocols if there is sufficient heterogeneity in match quality, search costs, or market tightness and that labor market tightness and relative costs of search play a key role in the choice of the wage-setting mechanism. ...
Journal Article
Closing Small and "Sufficiently" Large Open Economies with Different Asset Structures
There are two important dimensions that matter when we write down a model economy of a country that is open to international financial markets. The first one is its size, and the second one is its asset market structure. Small open economies are price takers so the analysis happens in partial equilibrium, while countries that are “sufficiently" large can affect international prices and the analysis happens in general equilibrium. The second important dimension is the asset market structure. If markets are complete there is full risk sharing, while if markets are incomplete there is not. In ...
Journal Article
COVID-19: Fiscal Implications and Financial Stability in Developing Countries
The COVID-19 pandemic has been unlike any other crisis that we have experienced in that it hit all economies in the world at the same time, compromising the risk-sharing ability of nations. At the onset of the pandemic, the World Bank (WB) and the International Monetary Fund (IMF) jointly pledged 1.16 trillion U.S. dollars to help emerging economies deal with COVID-19. Would this amount have been enough to preserve financial stability in a worst case scenario, and what were the fiscal implications of the pandemic? In this article we aim to answer these questions by documenting the size of the ...
Working Paper
Endogenous Borrowing Constraints and Stagnation in Latin America
The Latin American debt crisis of the 1980's had a major and long lasting effect on per-capita consumption: its level in 2005 was not that different from that in 1980. This paper studies the long stagnation in per-capita consumption that followed the crisis, and its relationship with recessions and sovereign risk, using a small open economy real business cycle model with complete markets, endogenous borrowing limits (limited commitment), endogenous capital accumulation, and domestic productivity and international interest rate shocks. I find that the model does an excellent job at explaining ...
Working Paper
The Dual Beveridge Curve
When firms decide to post a vacancy they can hire from the pool of unemployed workers or they can poach a worker from another firm. In this paper we show that if there are two different matching processes, one for unemployed workers and another one for job-to-job transitions, then implications for the Beveridge curve are potentially very different, influencing the effects of monetary policy on unemployment. We show that over the years the hiring process and how job postings are used as an input into this process has changed dramatically.
Bretton Woods and the Growth of the Eurodollar Market
The postwar system of fixed exchange rates forced many countries to impose capital/currency controls. Banks created a loophole with the eurodollar.