Results

Journal article

American Economic Journal: Economic Policy:

A macroeconomic approach to optimal unemployment insurance: theory

This paper develops a theory of optimal unemployment insurance (UI) in matching models. The optimal UI replacement rate is the conventional Baily-Chetty replacement rate, which solves the tradeoff between insurance and j...Read more...

Journal article

American Economic Journal: Economic Policy:

A macroeconomic approach to optimal unemployment insurance: applications

In the United States, unemployment insurance (UI) is more generous when unemployment is high. This paper examines whether this policy is desirable. The optimal UI replacement rate is the Baily-Chetty replacement rate plu...Read more...

CEP discussion paper

A model of aggregate demand and unemployment

We present a static model of aggregate demand and unemployment. The economy has a nonproduced good, a produced good, and labor. Product and labor markets have matching frictions. A general equilibrium is a set of prices,...Read more...

CEP discussion paper

Optimal Unemployment Insurance Over the Business Cycle

This paper characterizes optimal unemployment insurance (UI) over the business cycle using a model of equilibrium unemployment in which jobs are rationed in recession. It offers a simple optimal UI formula that can be ap...Read more...