Essays on Innovations, Technology and the Labor Market
Supervisor: Omar Licandro, June 2007, European University Institute
Explaining vacancy-unemployment volatility over the business cycle: the role of on-the-job-search
This paper addresses the vacancy-unemployment volatility over the business cycle by in cluding variable and productivity-specific on-the-job-search in a DSGE model with frictional labor markets. The model includes an endogenous distribution of match-specific productivities for the workers. The introduction of variable search intensity uncouples the aggregate search amount from unemployment in the model and augments the procyclical variability of search. This variability induces firms to open more vacancies during an upswing.
Productivity-specific on-the-job-search serves to keep rejection rates of job searchers low. We find that variable on-the-job search ampli.es shocks to aggregate productivity for labor market variables, but creates the ladder.climbing effect generates only small persistence through changes of the endogenous productivity distribution of employment.
Competition and Growth in a Cournot setup with imitation
This paper addresses the question how imitation and with it competition may foster growth in a neo-Schumpeterian economy. We assume free entry into an industry via imitation, but innovative R&D for a cost-reducing technology is undertaken only by incumbents in form of innovation races. Higher competition is expressed as easiness of imitation leading to a higher number of competitors in the industry. Competition has in addition to the traditional Schumpeterian effect of reducing incentives for innovation, a composition effect which shifts industries to be in market strucures which induce firms to innovate.