Dynamic Response to Monetary Shocks in a Search Model of the Labor Market*

Number: 
222
Published: 
Classification JEL: 
E3, E52, C32
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

This paper studies the dynamic response of a few key macroeconomic variables to each one of three exogenous shocks: monetary, government spending and technological shocks. By using a cash in advance model with two market frictions, one in the intermediati