Abstract
This paper studies the differences in the dynamics of employment between the nondurable and durable goods sectors. It shows that in the US economy, the durables sector exhibits a higher volatility of employment growth, and a higher relative volatility of job destruction to job creation, than does the nondurables sector. To account for these patterns, a two-sector Mortensen–Pissarides-type model is developed and two types of technology shocks—aggregate and investment-specific—are considered. The numerical results suggest that the model can capture many important features of the sectoral job flows.
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