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Kiel Institute for World Economics Kiel Working Papers, Kiel Institute for World Economics

No 1559:
On the Introduction of Firing Costs

Steffen Ahrens and Dennis Wesselbaum

Abstract: This paper provides a survey of the recent literature about firing costs and discusses the transmission channels of firing costs in a partial equilibrium context. In addition, we expand our analysis two types of firing costs in a New Keynesian model with purely endogenous separations. We further distinguish between the effects resulting from respecting and non-respecting the bonding critique. We find that the two types of firing costs do not show significant differences. However, respecting the bonding critique enhances the overall performance of the model

Keywords: Beveridge Curve, Endogenous Separations, Firing Costs; (follow links to similar papers)

JEL-Codes: E24,; E32,; J64; (follow links to similar papers)

36 pages, October 2009

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