Question: could you explain how to set up this problem 2. (18 points) In the search and matching model of unemployment studied in class, assume that

could you explain how to set up this problem

could you explain how to set up this problem 2. (18 points)

2. (18 points) In the search and matching model of unemployment studied in class, assume that the matching function takes the form ut Vt Ht = (2 + V ! ) Attention: work with the initial rate of unemployment ut throughout this exercise without assuming that it is equal to 1. (a) (4 points) Write the expression for the job finding and job filling rates using the matching function. (b) (2 points) Derive the free-entry condition and the corresponding job filling rate. (c) (2 points) Derive the Nash bargained wage. (d) (6 points) Solve for the equilibrium number of vacancies as a function of only exogenous variables and parameters. (e) (6 points) Find the equilibrium job filling rate, the job finding rate, and the end of period level of unemployment

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!