Equilibrium unemployment

Joao Gomes*, Jeremy Greenwood, Sergio Rebelo

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

57 Scopus citations


A search-theoretic model of equilibrium unemployment is constructed and shown to be consistent with the key regularities of the labor market and business cycle. The two distinguishing features of the model are: (i) the decision to accept or reject jobs is modeled explicitly, and (ii) markets are incomplete. The model is well suited to address a number of interesting policy questions. Two such applications are provided: the impact of unemployment insurance, and the welfare costs of business cycles.

Original languageEnglish (US)
Pages (from-to)109-152
Number of pages44
JournalJournal of Monetary Economics
Issue number1
StatePublished - Aug 2001


  • Business cycles
  • E24
  • E32
  • Incomplete markets
  • Search
  • Unemployment insurance
  • Welfare costs of business cycles

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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