## u* = √uv

This paper shows that under simple but realistic assumptions, the efficient unemployment rate u* is the geometric average of the unemployment and vacancy rates. In the United States, 1930–2022, u* is stable and averages 4.1%.

This paper shows that under simple but realistic assumptions, the efficient unemployment rate u* is the geometric average of the unemployment and vacancy rates. In the United States, 1930–2022, u* is stable and averages 4.1%.

This paper develops a model of p-hacking by researchers. It then gives critical values that correct the inflated type 1 error rates caused by p-hacking. For a two-sided z-test with significance level of 5%, the robust critical value is 2.57 (instead of 1.96).

This paper develops a policy-oriented business-cycle model with fluctuating unemployment, stable inflation, and long zero-lower-bound episodes. The innovations are that producers and consumers meet through a matching function, and wealth enters the utility function.

This paper develops a sufficient-statistic formula for the unemployment gap based on the Beveridge curve. The formula features the Beveridge elasticity, unemployment cost, and recruiting cost. In the United States the unemployment gap is generally positive and is countercyclical.

This paper develops a model of pricing in which buyers care about the fairness of markups but misinfer them from prices. The model yields price rigidity, generates realistic Phillips curves, and explains why people dislike inflation so much.

This paper resolves the anomalies of the New Keynesian model at the zero lower bound—explosive recession, forward guidance puzzle, multiplier puzzle—by introducing wealth into the utility function.

This paper shows that when unemployment is inefficient, optimal public expenditure deviates from the Samuelson rule to reduce the unemployment gap. Optimal stimulus spending is governed by the unemployment gap, unemployment multiplier, and an elasticity of substitution.

This paper develops a model of science. It shows that due to homophily in tenure decisions, false paradigms may persist when a science has low power. Low power may come from lack of evidence, or from reluctance to base tenure decisions on available evidence.

This paper explores how the optimal replacement rate of unemployment insurance varies over the business cycle in the United States. It finds that the optimal replacement rate is countercyclical, just like the actual replacement rate.

This paper develops a theory of optimal unemployment insurance in matching models. It derives a sufficient-statistic formula for optimal unemployment insurance, which is useful to determine the optimal cyclicality of unemployment insurance.

This paper develops a model of unemployment fluctuations. The innovation is to represent the labor and product markets with a matching structure. The model simultaneously features Keynesian unemployment, classical unemployment, and frictional unemployment.

This paper develops a New Keynesian model in which the government multiplier doubles when the unemployment rate rises from 5% to 8%. The multiplier is so countercyclical because in bad times, on the labor market, job rationing dwarfes matching frictions.

This paper proposes a matching model of the labor market with job rationing: unemployment does not disappear in the absence of matching frictions. In recessions, job rationing drives the rise in unemployment, whereas matching frictions contribute little to unemployment.