Marco Guerrazzi

The Transition from Temporary to Permanent Employment: Evidence from Tuscany

In this paper, by distinguishing between the decisions made by the workers and those made by the firms, we provide a probabilistic evaluation of the transition from temporary to permanent employment in a regional context. Specifically, by exploiting a multinomial nested logit strategy of estimation, we find that the transition to a permanent job is far from certain, especially for women and older workers.

Search and Stochastic Dynamics in the Old Keynesian Economics: A Rationale for the Shimer Puzzle

Following Farmers micro‐foundation of the General Theory, I build a competitive search model in which agents are divided in two categories, i.e. wage and profit earners. Within this framework, I show that the model economy has a continuum of equilibria that might be consistent with a certain degree of endogenous real stickiness. Moreover, calibrating and simulating the model in order to fit US first‐moment data, I show that this setting can provide a rationale for the Shimer puzzle, i.e. the relative stability of labor productivity in spite of the large volatility of labor market tightness.

The ‘Farmerian’ Approach to Ending a Finance-Induced Recession: Notes on Stability and Dynamics

In this paper, I explore the out‐of‐equilibrium dynamics of Farmers ME‐NA model. Maintaining the assumption that all the variables continuously have the same time reference, I build a model that describes the adjustments of the value of output and the interest rate under the hypothesis that public debt and the stock market value are given. Within this framework, I show that the economy has a unique stationary solution whose dynamics are stable. Moreover, simulating the model under its baseline calibration, I show that adjustments towards the steady‐state occur through convergent oscillations while the most promising way out from a finance‐induced recession is a policy mix that combines a mild fiscal expansion with interventions aimed at altering the trade‐off between holding risky and safe assets.

Expectations, employment and prices: a suggested interpretation of the new 'farmerian' economics

This paper aims at providing a critical assessment of the new ‘Farmerian’ economics, i.e. the recent Farmer’s attempt to provide a new micro-foundation of the General Theory grounded on modern search and business cycle theories. Specifically, I develop a theoretical model that summarizes the main arguments of the suggested approach by showing that a special importance has to be attached to the search mechanism, the choice of units and ‘animal spirits’ modelling. Thereafter, referring to self-made real-business-cycle experiments, I discuss the main empirical implications of the resulting framework. Finally, I consider its policy implications by stressing the problematic nature of demand management interventions and the advisability of extending the role of the central bank in preventing financial bubbles and crashes.