Online appendix for the Review of Economic Dynamics article

Online appendix for the Review of Economic Dynamics article

Online appendix for the Review of Economic Dynamics article

We propose a duality approach to solving contracting models with either one-sided or two-sided limited commitment in continuous time. We establish weak and strong duality theorems and provide a dynamic programming characterization of the dual problem. The dual problem gives a linear...

A dynamic multi-sector model with both net and excess mobility is developed to quantify the determinants of the canonical increasing wage-tenure profile. The model distinguishes between three potential factors: sector-specific skill accumulation, sector-specific shocks, and dynamic worker-sector...

We develop a model of matching from firms' perspectives and draw resulting conclusions for the macro-dynamics of an economy. The key insight is that firms may wish to hire workers that are bad matches (having low productivity) in high-demand states, even if the worker must be hired to a long-run...

We present an envelope theorem for establishing first-order conditions in decision problems involving continuous and discrete choices. Our theorem accommodates general dynamic programming problems, even with unbounded marginal utilities. And, unlike classical envelope theorems that focus only on...

We develop a model of stock-flow matching in the labor market which allows for rich heterogeneity of match quality. The economy consists of many labor markets, and workers and jobs continually flow into each labor market. Within a labor market, potential worker-job matches differ in quality....

This paper builds a computational life cycle model and simulates the Great Depression in order to assess the historical welfare implications of implementing Social Security during this business cycle episode. A well established result in the literature is that when comparing steady states with...

We show that labor search frictions are an important determinant of the cross-section of equity returns. In the data, sorting firms by loadings on labor market tightness, the key statistic of search models, generates a spread in future returns of 6% annually. We propose a partial equilibrium...