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.
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 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 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.