Arbeitspapier
Moral hazard, optimal unemployment insurance, and aggregate dynamics
In this paper, I explore how optimal aggregate dynamics can be shaped by the presence of moral hazard in unemployment insurance. I also analyze the optimal provision of unemployment insurance and the implications for the amount of cross-sectional heterogeneity. The economy that I consider embeds the Hopenhayn-Nicolini unemployment insurance model into a real business cycle model with search frictions. In a calibrated version I find that the presence of private information has large effects on optimal aggregate steady-state dynamics but not on aggregate fluctuations. In addition, I find that optimal consumption replacement ratios are approximately independent of the business cycle.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. WP 2022-07
- Classification
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Business Fluctuations; Cycles
Unemployment: Models, Duration, Incidence, and Job Search
Unemployment Insurance; Severance Pay; Plant Closings
- Subject
-
Private information
Mechanism Design
Business Cycles
Moral hazard
Unemployment Insurance
- Event
-
Geistige Schöpfung
- (who)
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Veracierto, Marcelo
- Event
-
Veröffentlichung
- (who)
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Federal Reserve Bank of Chicago
- (where)
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Chicago, IL
- (when)
-
2022
- DOI
-
doi:10.21033/wp-2022-07
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Veracierto, Marcelo
- Federal Reserve Bank of Chicago
Time of origin
- 2022
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