where aggregate shocks have a permanent effect on the unemployment rate. If agents' wealth decreases, the unemployment rate … increases for a potentially indefinite period. This makes unemployment rate dynamics path dependent as in Blanchard and Summers … (1987). I argue that this feature explains the persistence of the unemployment rate in the U.S. after the Great Recession …

This Selected Issues paper assesses the youth unemployment problem in advanced European economies, especially the euro … area. Youth unemployment rates increased sharply in the euro area after the crisis. Much of these increases can be … explained by output dynamics and the greater sensitivity of youth unemployment to economic activity compared with adult …

available labor. In the aftermath of the crisis, boosting growth is essential to prevent unemployment from becoming a long … unemployment rates and lower participation rates, on the other hand, cannot easily be attributed to individual preferences. Here …. Differences in labor taxation, unemployment benefit systems, and employment protection will need to be reduced. Improving …

The crisis has intensified what was previously a chronic unemployment problem in Europe; youth unemployment is now at … unprecedented highs in some European countries. This paper assesses the main drivers of youth unemployment in Europe. It finds that … much of the increase in youth unemployment rates during the crisis can be explained by output dynamics and the greater …

The SDN will assess the youth unemployment problem in advanced European countries, with a special focus on the euro … area. It will document the main trends in youth and adult unemployment in 22 European countries before and after the global … financial crisis. It will identify the main drivers of youth and adult unemployment, focusing in particular on the role of the …

policies should also help reduce the scope for further hysteresis effects to develop (e.g., loss of skills, discouragement). …