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The model initial setup is The number of vacancies posted in the economy during a particular month is v = 100. There were initially u

The model initial setup is The number of vacancies posted in the economy during a particular month is v = 100. There were initially u = 225 unemployed workers at the beginning of the month. Suppose that the average wage is 0.6 relative to their productivity. Unemployed workers receive bene ts that are half the wage, i.e., b = 0:3 relative to productivity. Suppose that the number of matches between rms and workers are given by the following matching functions M = Au0:5v0:5: 1 Suppose that 45 workers were able to nd a job by the end of the month

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