Please wait a minute...
Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2015, Vol. 10 Issue (3) : 449-466    https://doi.org/10.3868/s060-004-015-0019-4
research-article
Learning and Efficiency with Search Frictions
Xi Weng()
Department of Applied Economics, Guanghua School of Management, Peking University, Beijing 100871, China
 Download: PDF(219 KB)  
 Export: BibTeX | EndNote | Reference Manager | ProCite | RefWorks
Abstract

This paper studies the allocative efficiency in a Moscarini (2005)-type equilibrium search environment with learning. It is shown that the stationary equilibrium is efficient if and only if the Hosios condition holds no matter whether learning is about firm-specific human capital or about general human capital. However, the stationary equilibrium can never be efficient if externalities exist from unemployment. In contrast, even with externalities, the stationary equilibrium can be efficient under some modified Hosios condition if there is no uncertainty (standard Mortensen and Pissarides (1994)-type equilibrium search environment). The key intuition is that the equilibrium can only be efficient if firm-worker matching is formed and terminated efficiently.

Keywords learning      efficiency      search friction      Nash bargaining      firm specific human capital      general human capital     
Issue Date: 22 October 2015
 Cite this article:   
Xi Weng. Learning and Efficiency with Search Frictions[J]. Front. Econ. China, 2015, 10(3): 449-466.
 URL:  
https://academic.hep.com.cn/fec/EN/10.3868/s060-004-015-0019-4
https://academic.hep.com.cn/fec/EN/Y2015/V10/I3/449
[1] Yi Che, Zuojun Fan, Yan Zhang. The Effect of Land Reallocation on Off-Farm Employments in Rural China[J]. Front. Econ. China, 2019, 14(3): 401-427.
[2] Haiwen Zhou. Coordination Costs, Market Size, and the Choice of Technology[J]. Front. Econ. China, 2019, 14(1): 131-148.
[3] Guoqiang Tian. Deceleration of China’s Economic Growth: Causes and Countermeasures[J]. Front. Econ. China, 2019, 14(1): 3-25.
[4] Henry Y. Wan Jr.. Involuntary Unemployment: An Expository Note[J]. Front. Econ. China, 2018, 13(1): 83-92.
[5] Ying Chu Ng, Suthathip Yaisawarng. Can a Government Initiate Enterprise Reform to Improve Efficiency? A Cross-Section Analysis of the Chinese Pharmaceutical Industry[J]. Front. Econ. China, 2017, 12(4): 607-634.
[6] Hailong Qian. Redundancy of Moment Conditions in Restricted GMM Estimation[J]. Front. Econ. China, 2016, 11(3): 468-497.
[7] Ming Lei,Zihan Yin. An Analysis of Energy and Environment Efficiency of China’s Iron and Steel Industry[J]. Front. Econ. China, 2016, 11(1): 123-141.
[8] Qi Sun,Tiao Li,Fang Wu. Enforcement of Capacity-Differentiated Regulations in China: Evidence from Coal-Fired Power Plants[J]. Front. Econ. China, 2015, 10(4): 604-628.
[9] Haiwen Zhou. The Choice of Technology and Equilibrium Wage Rigidity[J]. Front. Econ. China, 2015, 10(2): 252-271.
[10] Wenjun Liu, Shuliang Zou. Does Openness Increase the Efficiency of China’s Manufacturing Firms? Evidence from the World Bank Investment Climate Survey[J]. Front Econ Chin, 2013, 8(3): 430-451.
[11] Hui He, Hao Zhang. A Rapid Grid Search Method for Solving Dynamic Programming Problems in Economics[J]. Front Econ Chin, 2013, 8(2): 260-271.
[12] Kevin X. D. Huang, Chun Jiang, Qingyuan Li,, Kai Sheng, Jia Wang, Qiwei Zhao. Financial Development, Foreign Direct Investment, and the Efficiency of Capital Allocation in China[J]. Front Econ Chin, 2013, 8(2): 165-185.
[13] Yingxin Wu, Xianbo Zhou. Technical Efficiency in the Chinese Textile Industry[J]. Front Econ Chin, 2013, 8(1): 146-163.
[14] Jun Chen, Zhiqi Chen. The Quiet Life of a Monopolist: The Efficiency Losses of Monopoly Reconsidered[J]. Front Econ Chin, 2011, 6(3): 389-412.
[15] CUI Baomin, DENG Hongtu. The nature of land property rights and contract options in institutional changes: A case study of cooperation economy[J]. Front Econ Chin, 2009, 4(2): 250-264.
Viewed
Full text


Abstract

Cited

  Shared   
  Discussed