Marco Fongoni

*PUBLISHED* last year in July (2024) in AEJ Macro aeaweb.org/articles?id=10… Covering some macroeconomic implications of: - Incomplete employment contracts - Endogenous work effort for - Wage cyclicality / rigidity - Unemployment volatility

9/n I also discuss an extension with "money illusion" (generating endogenous path-dependent DNWR): when the central bank offsets hysteresis via higher inflation in downturns, the nominal rate absorbs the "remanence", staying permanently lower even as inflation remains stable.

8/n Quants: For plausible calibrations of the cost of wage cuts and workers’ sensitivity to relative wages, a 1% temporary shock can raise steady‑state unemployment by approx. 0.5–15% (benchmark range 1.5–5.5%), with pronounced asymmetries in vacancy and unemployment dynamics.

✴️New Working Paper✴️ on a theory of unemployment hysteresis based on several inherent features of labour markets. Very first draft here: amse-aixmarseille.fr/sites/default/…

I'd like to thank @AlexLoukas_ @georgeangelis @Gaudio_FS @csingletonecon @DSchaeferEcon for the first brush of feedback! more details to come...

7/7: The elasticity of (unobservable) effort and the cyclicality of wages are key model statistics: the paper surveys the available evidence to date from a wide range of sources in support of the key predictions of the model and to inform calibration.

6/7: Implication iii) unemployment volatility: quantitative assessment of the effect of firms' expectations about DNWR of existing workers on job creation. The effect is small: an increase in the expected frequency of wage freezes from 10 to 40% increases volatility by 10%.

*PUBLISHED* last year in July (2024) in AEJ Macro aeaweb.org/articles?id=10… Covering some macroeconomic implications of: - Incomplete employment contracts - Endogenous work effort for - Wage cyclicality / rigidity - Unemployment volatility

1/7: Wages are unilaterally set by firms and employment contracts are incomplete: work effort is discretionary and not contractible.

now * PUBLISHED* in >>> Management Science <<< Full Paper: pubsonline.informs.org/doi/10.1287/mn… Summary: linkedin.com/posts/marco-fo…