Monetary policy shocks reshape job market dynamics, impacting employment rates.
The article examines how changes in monetary policy affect job finding rates, worker separation rates, and vacancies in the US. By using a model that considers labor market frictions, capital accumulation, and price rigidities, the researchers found that wage rigidity, search costs, and non-market activities play important roles in shaping the economy's response to shocks. The study suggests that understanding these factors can help policymakers design effective monetary and labor market policies.