TY  - RPRT
        AU  - Lehmann, Etienne
AU  - Linden, Bruno Van der
        TI  - Search Frictions on Product and Labor Markets: Money in the Matching Function
        PY  - 2007/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2718
        UR  - https://www.iza.org/publications/dp2718
        AB  - This paper builds a macroeconomic model of equilibrium unemployment in which firms persistently face difficulties in selling their production and this affects their decisions to create jobs. Due to search-frictions on the product market, equilibrium unemployment is a U-shaped function of the ratio of total demand to total supply on this market. When prices are at their Competitive Search Equilibrium values, the unemployment rate is minimized. Yet, the Competitive Search Equilibrium is not efficient. Inflation is detrimental to unemployment.
        KW  - equilibrium unemployment
KW  - inflation
KW  - matching
KW  - demand constraints
        ER  -