This paper evaluates two theories of unemployment: the natural rate theory (whereby unemployment is depicted as … fluctuating around a reasonably stable natural rate) and the chain reaction theory (which views movements in unemployment as the … unemployment not only in the short run, but in the long run as well. The reason is that, in the presence of growing exogenous …

This paper views movements in unemployment as the result of the interaction between: (a) lags in labour market … decisions; and (b) labour market shocks with temporary and permanent components. Two features of unemployment dynamics are … examined: (i) `unemployment persistence', arising when temporary shocks have persistent effects on unemployment; and (ii …

In the past decades several features of U.S. unemployment dynamics have been investigated empirically. The original … focus of research was on the duration of unemployment. In later studies the cyclicality of incidence and duration …, compositional effects and duration dependence of the exit rate out of unemployment have been investigated. Unlike the partial …

In the past decades several features of U.S. unemployment dynamics have been investigated empirically. The original … focus of research was on the duration of unemployment. In later studies the cyclicality of incidence and duration …, compositional effects and duration dependence of the exit rate out of unemployment have been investigated. Unlike the partial …

This paper examines the movements in EU unemployment from two perspectives: (a) the NRU/NAIRU perspective, in which … unemployment movements are attributed largely to changes in the long-run equilibrium unemployment rate and (b) the chain …-reaction perspective, in which unemployment movements are viewed as the outcome of the interplay between labor market shocks and prolonged …

The aim of this paper is to analyze and estimate salient characteristics of unemployment dynamics. Movements in … unemployment are viewed as ‘ ‘ chain reactions’’ of responses to labor market shocks, working their way through systems of … construct aggregate measures of unemployment responses to temporary and permanent shocks. These measures are temporal (depicting …

This paper challenges what is the standard account of UK unemployment, namely that the major swings in unemployment … over the past 25 years are due predominantly to movements in the underlying empirical "natural rate of unemployment" (NRU … unemployment are due, instead, to very prolonged after-effects of persistent (transitory but long-lasting) shocks. We argue that (a …

This paper explores the two common concepts of the natural rate of unemployment: (i) the stable, long-run equilibrium … rate of unemployment; and (ii) the equilibrium unemployment rate at which there is no tendency for this rate to change … towards which the equilibrium unemployment rate tends with the passage of time). Specifically, it is not a reference point in …