Karanassou, Marika; Snower, Dennis J. - Forschungsinstitut zur Zukunft der Arbeit <Bonn> - 2007
and some real variable, x
t
,suchas
output, the output gap, real marginal costs, or the unemployment rate. From this, it … argue that this "persistency puzzle"
is highly misleading, relying on the exogeneity of the forcing variable (e.g. output … gap,
marginal costs, unemployment rate) and the assumption of a zero discount rate. We show
that when the discount rate …