4 votes
Accepted

Quarterly regression, year-fixed effects

I guess there's no easy answer. It depends on what you think the data generating process is. Let $y$ be year, $q$ be the quarter and $c$ be the country. Then $S_{y,q}$ is the USA shock at year $y$ and ...
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2 votes

Search and Matching model with 2 agents?

I am not sure if this is exactly what you are looking for, but this paper has model that sounds like what you want: Shimer, Robert, 2006. “On-the-job search and strategic bargaining, ”European ...
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  • 2,169
2 votes
Accepted

Why does a model that is used for policy analysis needs its shocks and parameters to be structural (= invariant) to the shock under consideration?

This is due to the famous Lucas critique. To make long story short, in the past in the heyday of Keynesian macroeconomics it was quite normal for macroeconomists to just postulate some relationships ...
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1 vote

Can heterogeneous prices be consistent with competitive equilibrium?

As a starting point, you might take a look at Stigler's model of price dispersion. Quoting from a resource I found online, George Stigler’s 1961 “The Economics of Information” begins with: "...
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