Labor Market Participation, Unemployment and Monetary Policy

Alessia Campolmi and Stefano Gnocchi

Staff Working Papers from Bank of Canada

Abstract: We incorporate a participation decision in a standard New Keynesian model with matching frictions and show that treating the labor force as constant leads to incorrect evaluation of alternative policies. We also show that the presence of a participation margin mitigates the Shimer critique.

Keywords: Business fluctuations and cycles; Labour markets; Transmission of monetary policy (search for similar items in EconPapers)
JEL-codes: E24 E32 E52 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2014
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac and nep-mon
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Labor market participation, unemployment and monetary policy (2016)
Working Paper: Labor Market Participation, Unemployment and Monetary Policy (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:14-9

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