TY  - BOOK
AU  - Khalifa,Sherif
TI  - Cyclical job upgrading, wage inequality, and unemployment dynamics
SN  - 10168737
AV  - HB1A1 INT 
PY  - 2013///
CY  - Abingdon
PB  - Taylor and Francis
KW  - Monetary policy
KW  - Search and matching,Sticky prices
KW  - Theory, Unemployment
N2  - This paper studies the implications of a monetary policy shock on the skill premium and the unemployment persistence. A VAR demonstrates that a contractionary policy induces a lagged decline in the skill premium and a larger and more persistent increase in the unemployment ratio of the unskilled relative to that of the skilled. A new Keynesian framework characterized by labor search frictions is developed. The labor force is divided into high and low educated. Firms post two types of vacancies: the complex that can be matched with the high educated, and the simple that can be matched with both the high and the low educated. A positive shock to the nominal interest rate induces the high educated unemployed to compete with the low educated, as they increase their search intensity for simple vacancies. As the high educated occupy simple vacancies, they crowd out the low educated into unemployment. This downgrading of jobs, and the subsequent crowding out of the low educated into unemployment, provide a possible explanation to unemployment persistence and the response of the skill premium
UR  - https://doi.org/10.1080/10168737.2012.685886
ER  -