Revisiting unemployment in intermediate macroeconomics: A new approach for teaching Diamond-Mortensen-Pissarides

The authors present a version of the Diamond-Mortensen-Pissarides model of unemployment that is accessible to undergraduates and preserve the dynamic structure of the original model. The model is solvable in closed form using basic algebra and admits a graphical representation useful for illustrating a variety of comparative statics. They show how to use the model to teach the effects of labor market policies, advancements in Internet technology, and labor market dynamics. Supplementary materials such as teaching tips, a classroom experiment, and online resources including a JavaScript-based simulation tool, U.S. data used to make figures, and practice problems are provided.