This paper studies the impact of informality on the long-run relationship between inflation and unemployment in … money and credit coexist. An increase in inflation affects unemployment through two channels: the entry channel (size) and … entry and increasing unemployment. On the other hand, it shifts firms hiring decision from high separation informal jobs to …

unemployment in developing economies. I present a monetary dynamic general equilibrium model with search frictions in both labor … rate affects unemployment through two channels: On the one hand, higher inflation reduces the surplus of monetary trades … which lowers firms' profits, job creation and increases unemployment. On the other hand, it shifts firms' hiring decision …