Regression modelLabor Economics
Diamond-Mortensen-Pissarides Search-Matching Model
The Diamond-Mortensen-Pissarides (DMP) model, developed by Peter Diamond, Dale Mortensen, and Christopher Pissarides in the early 1980s, is a fundamental framework for understanding labor market dynamics through the lens of search and matching frictions. It explains how workers and firms meet, form employment relationships, and separate, endogenously determining unemployment, vacancies, and wages.
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Sources
- Mortensen, D. T., & Pissarides, C. A. (1994). Job Reallocation, Employment Fluctuations and Unemployment. In J. B. Taylor & M. Woodford (Eds.), Handbook of Macroeconomics, 1A, 1171–1227. DOI: 10.1016/S1574-0048(99)10039-6 ↗
- Diamond, P. A. (1982). Wage Determination and Efficiency in Search Equilibrium. Review of Economic Studies, 49(2), 217–227. DOI: 10.2307/2297271 ↗
- Pissarides, C. A. (1985). Short-Run Equilibrium Dynamics of Unemployment, Vacancies, and Real Wages. American Economic Review, 75(4), 676–690. link ↗