This paper develops a model with multiple steady states (low tax and unemployment rate versus high tax and unemployment … European unemployment rates observed during the seventies. The explanation given is that even if the unemployment rate would … job creation remains low making the return to a low unemployment rate impossible. The paper shows that in some cases …

institutions, the tax wedge definition, and the temporal focus significantly affect the results. In the long run, workers bear …

trend rates. Unemployment notably continues to rise and its pace of increase has accelerated in the most recent quarter to …