This paper develops a rational expectations model with multiple equilibrium unemployment rates where the price of … capital may be unbounded above. I argue that this property is an important feature of any rational-agent explanation of a … financial crisis as a large negative self-fulfilling shock to the expectation of the future price of capital. This shock causes …

We propose a theory of low-frequency movements in unemployment based on asymmetric real wage rigidities. The theory … generates two main predictions: long-run unemployment increases with (i) a fall in long-run productivity growth and (ii) a rise …-run unemployment over the 1980s and its rise during the late 2000s. …

growth model with capital mobility that emphasizes a link between wages, savings and growth. We identify the conditions on … the emergence of national unemployment due to minimum wages. Interestingly, differences in national savings propensities …

This paper studies the joint behaviour of inflation and unemployment in Spain over the period 1964–95 in order to … on the effects of demand shocks on the unemployment rate. Our estimates suggest, according to the reader’s prior belief …

. Furthermore, they fail to allow for quantity rationing and to model unemployment as a catastrophic event. The macroeconomics based …

This paper develops a theory characterizing the effects of fiscal policy on unemployment over the business cycle. The … theory is based on a model of equilibrium unemployment in which jobs are rationed in recessions. Fiscal policy in the form of … government spending on public-sector jobs reduces unemployment, especially during recessions: the fiscal multiplier …

which there are multiple equilibrium unemployment rates. The model has two equations in common with the new-Keynesian model …