Technical appendix for frictional wage dispersion in search models

Technical appendix for frictional wage dispersion in search models

by Andreas Hornstein

Part of Working paper -- no. 06-8

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"In this technical appendix to Hornstein, Krusell, and Violante (2006) (HKV, 2006, hereafter) we provide a detailed characterization of the search model with (1) wage shocks during employment and (2) on-the-job search outlined in Sections 6 and 7 of that paper, and we derive all of the results that are only stated in HKV (2006). In particular, we derive the expressions for our preferred measure of frictional wage inequality: the ratio of average wages to the reservation wage, or, the 'mean-min' wage ratio."--Federal Reserve Bank of Richmond web site.

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