We construct a utility-based model of fluctuations, with nominal rigidities and unemployment, and draw its implications … for the unemployment-inflation tradeoff and for the conduct of monetary policy.<br><br>We proceed in two steps. We first … unemployment in the constrained efficient allocation. We then focus on the implications of alternative real wage setting mechanisms …

-to-specific testing strategy reveals a recursive structure where only the unemployment rate and long-term interest rates are directly …

After an expansionary monetary policy shock employment increases and unemployment falls. In standard New Keynesian … models the fall in aggregate unemployment does not affect employed workers at all. However, Lüchinger, Meier and Stutzer … (2010) found that the risk of unemployment negatively affects utility of employed workers: An increases in aggregate …

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

model labor market frictions and unemployment explicitly. The present paper describes some of the essential ingredients and …

We propose a monetary model in which the unemployed satisfy the official US definition of unemployment: they are people ….e., unemployment is 'involuntary'). We integrate our model of involuntary unemployment into the simple New Keynesian framework with no … capital and use the resulting model to discuss the concept of the 'non-accelerating inflation rate of unemployment'. We then …