FROM ONE TO MANY ISLANDS: THE EMERGENCE OF SEARCH AND MATCHING MODELS
Article first published online: 13 APR 2011
© 2011 The Authors. Bulletin of Economic Research © 2011 Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research.
Bulletin of Economic Research
Volume 64, Issue 3, pages 393–414, July 2012
How to Cite
Batyra, A. and De Vroey, M. (2012), FROM ONE TO MANY ISLANDS: THE EMERGENCE OF SEARCH AND MATCHING MODELS. Bulletin of Economic Research, 64: 393–414. doi: 10.1111/j.1467-8586.2010.00389.x
- Issue published online: 3 JUL 2012
- Article first published online: 13 APR 2011
- supply and demand
The notion of frictional unemployment failed to grow into a full-fledged theory in the writings of Beveridge, Pigou and Hicks, as these economists were unwilling and/or unable to go beyond the then-prevailing Marshallian approach. Here, first we make explicit the trade organization assumptions underpinning Marshall's equilibrium theory. Next we examine Beveridge's, Pigou's and Hicks' early works on wages and unemployment. Finally, we look at the seminal papers that paved the way for search literature: McCall, Lucas and Prescott, Mortensen and Pissarides. We show that they succeed in providing an unemployment result, because they indeed depart from the Marshallian trade organization.