When the economy is in a liquidity trap and households have a precautionary motive to save against unemployment risk … unemployment risk and decline in demand. As a result, market incompleteness may alleviate contractions in output and inflation …

able to absorb the additional workers. Comparing the two instruments, cuts in public hiring increase unemployment …

that long-term unemployment is only weakly related to inflation depends on the assumption of linearity in the Phillips … curve. Specifically, once convexity is allowed for during the estimation process, long-term unemployment appears to have a … significant negative influence on wage inflation, whereas in a linear Phillips curve model it is only the short-term unemployment …

fluctuations of vacancies and unemployment in our model can replicate those observed in the US data, with labour market tightness … for the new hires and the calibration is consistent with the estimated elasticity of unemployment to unemployment benefits …

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 …

Skill erosion during unemployment was of particular concern as unemployment duration increased in the Great Recession … unemployment pool's skill composition, and hence the output produced by other firms' new hires. As a consequence, job creation is …

and nominal rigidities in the goods market. It finds that firing costs and unemployment benefits can have substantial …. Hence, firms adjust to shocks mainly through prices, and inflation then becomes more volatile. Raising unemployment benefits …