This course presents various matching models of unemployment. It uses them to study unemployment fluctuations, job rationing, unemployment gap, and labor market policies—minimum wage, payroll tax, public employment, and unemployment insurance.
This paper explores how the optimal generosity 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.