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Question:

art B: COVID-19, Jobkeeper and Unemployment in the Pandemic. Consider the following matching model of the labour market. The same model will be used for the remaining questions (Q7-Q12). M=Mu(1e) (1) Matching Function S=(1u)s (2) Separation Function (3) Steady State Equilibrium =0.5+0.01ycrs+M (4) Equilibrium Market Tightness In the above equations, e2.7183, notation is as in the lecture notes, and in addition, the matching efficiency, the separation rate, the worker's bargaining power and the income per worker depends on the spread of covid-19 (which is denoted by covid) and the government policies aimed to support jobs (which is denoted by jobkeeper): Msy=0.80.25covid,=0.025+0.125covid0.5jobkeeper,=0.5,=10010covid. Given that the values c=1, and r=0.05, Using the same model: Calculate the value of u where covid =0.4 and jobkeeper =0. Give your answers to 4 decimal places. art B: COVID-19, Jobkeeper and Unemployment in the Pandemic. Consider the following matching model of the labour market. The same model will be used for the remaining questions (Q7-Q12). M=Mu(1e) (1) Matching Function S=(1u)s (2) Separation Function (3) Steady State Equilibrium =0.5+0.01ycrs+M (4) Equilibrium Market Tightness In the above equations, e2.7183, notation is as in the lecture notes, and in addition, the matching efficiency, the separation rate, the worker's bargaining power and the income per worker depends on the spread of covid-19 (which is denoted by covid) and the government policies aimed to support jobs (which is denoted by jobkeeper): Msy=0.80.25covid,=0.025+0.125covid0.5jobkeeper,=0.5,=10010covid. Given that the values c=1, and r=0.05, Using the same model: Calculate the value of u where covid =0.4 and jobkeeper =0. Give your answers to 4 decimal places