Global dynamics in a search and matching model of the labor market

摘要

We study global and local dynamics of a simple search and matching model of the labor market. We show that the model exhibits chaotic and periodic dynamics for empirically plausible parameter values both in backward and forward time. In contrast to the global results, we show that the model can be locally indeterminate or have no equilibrium at all, but only for parameterizations that are empirically unreasonable. In contrast to earlier work, we establish these results analytically without placing numerical restrictions on the parameters.