u* = √uv

This paper argues that in the United States the full-employment rate of unemployment (FERU) is the geometric average of the unemployment and vacancy rates. Between 1930 and 2023, the FERU averages 4.1% and is very stable.

June 2024 · Pascal Michaillat, Emmanuel Saez

Unemployment

This course presents a matching model of unemployment. It uses the model to study unemployment fluctuations; job rationing; efficient unemployment and unemployment gap; and labor market policies such as minimum wage, public employment, and unemployment insurance.

March 2024 · Pascal Michaillat

Economic Slack

This graduate course presents various matching models of economic slack. It uses them to study business-cycle fluctuations; Keynesian, classical, and frictional unemployment; optimal monetary policy and the zero lower bound; and optimal government spending.

January 2024 · Pascal Michaillat

Business Cycles and How to Tame Them

This minicourse presents basic facts about business cycles. It then develops a matching model to explain these business-cycle facts. Finally, it explains how monetary policy and government spending should be designed to tame business cycles.

December 2023 · Pascal Michaillat

Beveridgean Unemployment Gap

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

December 2021 · Pascal Michaillat, Emmanuel Saez