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The fundamental surplus strikes again
Journal article   Peer reviewed

The fundamental surplus strikes again

Lars Ljungqvist and TJ Sargent
Review of Economic Dynamics, Vol.41, pp.38-51
2021

Abstract

Alternating offer bargaining DSGE Business cycle Matching model Fundamental surplus Unemployment
The fundamental surplus isolates parameters that determine how sensitively unemployment responds to productivity shocks in the matching models of Christiano et al. (2016 and this issue) under either Nash bargaining or alternating-offer bargaining. Those models thus join a collection of models in which diverse forces are intermediated through the fundamental surplus.

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