*European emerging markets and economies occupy a unique position within the global financial system due to their interconnectedness with the euro area. While these economies are significantly dependent on the euro, they face global shocks stemming from fluctuations in the US dollar. This study investigates the distinct transmission channels of monetary policy shocks originating from the US Federal Reserve and the European Central Bank to these jurisdictions. To achieve this, a shadow rate term structure model is estimated for Czechia, Hungary, and Poland, enabling the decomposition of bond yields into expectations and term premia components. This approach allows for the distinction between signaling and portfolio rebalancing channels of international shock transmission in the case of emerging markets.

**This paper develops a theory of optimal job retention in a dynamic matching model. Optimal job retention sets a minimum productivity below which a match should be terminated. This productivity depends on the output gain that would be generated by moving a worker to another job, plus a correction term that depends on the efficiency of labor market tightness. In matching models, the laissez faire tightness is generally inefficient, so changing the number of new unemployed workers can correct for the inefficiency. If the effect of JR on unemployment through unemployment is straightforward, the effect on job creation is more ambiguous. The effect of JR on job creation depends on the model: increasing JR can increase job creation by increasing the duration of each match or decrease job creation by increasing the tax on labor to retain low-productive jobs.