A Three State Model of Worker Flows in General Equilibrium

The material in this paper was previously contained in a paper that circulated with the title "Labor Suuply in a Frictional Labor Market". We thank Nicola Pavoni and Naoki Shintoyo for useful comments as well as seminar participants at CEMFI, Columbia, Universitat Autonoma de Barcelona, USC, UCLA, the Atlanta Fed, Yale, UC Riverside, Queen's, Georgetown, Wharton, Toronto, Ryerson, Western Ontario, Stocholm School of Economics, IIES, University of Oslo, Concordia, Northern Illinois, Yonsei University and Korea University, and conference participants at the Labor Markets Conference at the IFS (2008), the Winter Institute of Macroeconomics 2009 (Tokyo), the Bewley Conference at UT Austin, and the 2009 SED (Istanbul). We thank Joe Song for excellent research assistance. Krusell and Rogerson acknowldege financial support from the NSF. The views expressed in this article are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System. Corresponding author: Richard Rogerson. Address for correspondence: Department of Economics, Arizona State University, Tempe, AZ 85287. Phone: 480-727-6671. Fax: 480-965-0748. Email: Richard.Rogerson@asu.edu The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.