Analysis of the Effect of Economic Growth on Unemployment and Labor Market Flows

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This project studies the impact of long-run productivity growth on unemployment. This study first establishes several important facts on the relationship between productivity growth and labor market variables ; productivity growth increases the job finding rate and reduces the separation rate, lowing unemployment at low frequencies in the US. In order to explain these observed facts, I develop a search and matching model with on-the-job search, and shows that the theoretical model generates an empirically consistent prediction. This research project appeared in the international well known academic journal, Journal of Monetary Economics.