Blanchard, Olivier; Galí, Jordi - Department of Economics and Business, Universitat … - 2006
unemployment in the constrained efficient allocation. We then focus on the implications of alternative real wage setting mechanisms … for fluctuations in un- employment. We show the role of labor market frictions and real wage rigidities in determining the … market frictions and real wage rigidities. We show the nature of the tradeoff between inflation and unemployment …