Markets with Frictions

Why do unemployment and job vacancies coexist? Why do some workers struggle to find jobs while firms struggle to hire? And how can public policy shape these outcomes?

Many markets—from labor to housing—are characterized by search frictions: buyers and sellers do not meet instantaneously, matching requires time and resources, and markets do not clear smoothly. These frictions generate unemployment alongside unfilled vacancies, slow job creation, and create persistent mismatches between workers, firms, and locations.

This summer school offers a rigorous research-master/PhD–level introduction to the core models used to study frictional markets. We place particular emphasis on labor markets and the policy implications that emerge from modern search-and-matching theory but we also consider housing and product markets.