Hello, professor,

The paper of Shimer what does is to calibrate the model of a matching model in the labor market,
and then compare the data with the calibrated model and the empirical data. Shimer has to
calibrate the model because there is no arithmetic solution to the model itself.

What he finds is that given the calibrated model, with productivity and separation rate shocks1,
the model underestimates the variance in the unemployment (u) and in the vacancies (v). The
standard deviation is 10x larger with the empirical data with productivity shocks. With a
separation rate shock, the model gives a perfect positive correlation between u and v, when the
empirical data shows an almost perfect negative correlation.

With this

1
A separation rate shock is to make more possible that the firm fires you.