In responding to the extremely weak global economy after the financial crisis in 2008, many industrial nations have …

This paper develops a rational expectations model with multiple equilibrium unemployment rates where the price of … financial crisis, since for the expansion phase of the crisis to be rational, investors must credibly believe that asset prices … financial crisis as a large negative self-fulfilling shock to the expectation of the future price of capital. This shock causes …

This paper argues that the natural rate of unemployment hypothesis, in which equilibrium unemployment is determined by …, equilibrium unemployment is haunted by hysteresis. The curious history of the natural rate hypothesis is considered, curious … evidence regarding hysteresis effects on output and unemployment is then reviewed. …

credit creation to the global financial crisis, we argue that growth over recent decades has been increasingly financed by … credit creation and that the subprime crisis was both a signature and only one possible trigger in an increasingly unstable …