Search Results
Working Paper
Nonlinear Search and Matching Explained
Competing explanations for the sources of nonlinearity in search and matching modelsindicate that they are not fully understood. This paper derives an analytical solution to atextbook model that highlights the mechanisms that generate nonlinearity and quantifiestheir contributions. Procyclical variation in the matching elasticity creates nonlinearity inthe job finding rate, which interacts with the law of motion for unemployment. These resultsshow the matching function choice is not innocuous. Quantitatively, the Den Haan et al.(2000) matching function more than doubles the skewness of ...
Briefing
Untangling Persistent Inflation: Understanding the Factors at Work
While recent inflation numbers have been encouraging, persistent inflationary pressures remain a topic of concern and policy deliberation. This article delves into some candidate drivers of inflation persistence and their implications for monetary policy. In particular, we explore factors contributing to the persistence of inflation, such as intrinsic persistence, complementarities, indexation, unanchoring of expectations, fiscal policy and other persistent inflationary shocks.
Report
Ordinal Complementarity
This paper introduces ordinal complementarity: a feature of stochastic production functions that is robust to monotonic transformations of inputs X and output Y. It has two equivalent definitions: supermodularity of the conditional survival function under a first-order stochastic dominance ordering, and supermodularity of E[Q(Y )|X] for all non-decreasing valuations Q. Relative to existing conventions, this definition offers a strengthening with more robust policy implications. Ordinal complementarity is necessary and sufficient for a number of social planner problems to have monotone ...