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Consider a simple economy with search unemployment. The matching function is given by = 0.1 ! ! . The supply curve of the
Consider a simple economy with search unemployment. The matching function is given by = 0.1 ! " ! " . The supply curve of the workers is given by: () = ! ". Let = 1000, = 0.4, = 1, = 0.05 = 0.5, where is the cost of creating a vacancy. Calculate the market tightness. Show your calculations in detail
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