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When workers are exposed to human capital depreciation during periods of unemployment, hiring affects the unemployment … during unemployment into an otherwise standard New Keynesian model with search frictions in the labour market leads to the …
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We estimate a New Keynesian model with matching frictions and nominal wage rigidities on UK data. We are able to identify important structural parameters, recover the unobservable shocks that have affected the UK economy since 1971 and study the transmission mechanism. With matching frictions,...
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