This paper studies efficiency in the housing market in the presence of search frictions and endogenous entry of buyers and sellers. These two features are essential to explain the housing market stylized facts and to generate an upward-sloping Beveridge Curve in the housing market. Search frictions and endogenous entry create two externalities in the market. First, there is a congestion externality common to markets with search frictions. Sellers do not internalize the effect of listing a house for sale on other sellers’ probability of finding a buyer. Second, the endogenous entry of buyers leads to a participation externality, as new entrants in the market raise search costs for all buyers. The equilibrium is inefficient even when the Hosios-Mortensen-Pissarides condition holds. Using a calibration to the US housing market, we quantify the size of these externalities and how far the housing market is from the optimal allocation. The optimal vacancy rate and time-to-sell are about half their equilibrium counterparts, whereas the optimal number of buyers and homeowners are above their decentralized equilibrium values. Finally, we investigate how housing market policies restore efficiency in the housing market.

That Brexit disrupted the UK economy is widely agreed. Studies refer to its impact on exports and imports and on food prices. Less work has been done with respect to the impact on the labour market. This article concentrates on the relationship between vacancies and unemployment, which serves as an indicator of labour market tightness. Post-Brexit, the number of vacancies relative to the number of people unemployed increased dramatically. Analysis is based upon difference-in-difference methods. It suggests that by mid 2022 the UK’s V/U ratio might have been some 25% higher than it would have been without Brexit.

This study investigates the impact of the massive and unexpected influx of Syrian refugees on the job vacancy rates (JVRs) and job-finding rates (JFRs) in Turkey between 2009–2015 and 2009–2018. We employed the instrumental variable approach to address potential endogeneity issues. While we found no significant causal impact of the Syrian refugees on JVR, they decreased JFR between 2009 and 2018. A reduction in JFR indicates that the Beveridge Curve shifted inwards, thereby raising matching efficiency and facilitating an improvement in labour market conditions. Furthermore, our research indicated differences in coefficients and significance in JVR and JFR across occupations, as well as different effects in these areas between the short and long term. However, the results demonstrate that the rapid and unexpected influx of Syrian refugees alleviated JVR and JFR in most of the occupation groups.

This paper builds a standard search model with flexible prices and wages, and extensive and intensive labor adjustments. Money is introduced into the model through a cash-in-advance constraint in which only consumption is cash constrained. The model reproduces labor-market dynamics under a productivity shock and/or a monetary shock. I can replicate the Beveridge and Phillips curves that are observed in the data, and do not need to rely on the New Keynesian model or real wage rigidity. I find that the nonexistence of an extensive margin and different money mechanisms, such as cash constraints on investment and money in the utility function, do not change the above replications. Furthermore, I can still replicate the Beveridge curve even without money or with rigid prices.

This paper models the liquidity effects after a contractionary open market operation in a framework that highlights the frictions of limited participation in financial markets and search frictions in labor markets. It is shown that Lucas rigidities, with the aid of labor market rigidities, could generate more persistent liquidity effects even in a context of flexible prices. In addition, the simulation results show that this adapted liquidity and labor search model does a reasonable good job in explaining the observed labor market dynamics in response to shocks of a plausible magnitude, and deliver substantial movements along a downward-sloping Beveridge curve.