This paper views movements in unemployment as the result of the interaction between: (a) lags in labour market … decisions; and (b) labour market shocks with temporary and permanent components. Two features of unemployment dynamics are … examined: (i) `unemployment persistence', arising when temporary shocks have persistent effects on unemployment; and (ii …

This Paper presents a reappraisal of unemployment movements in the European Union. Our analysis is based on the chain … reaction theory of unemployment, which focuses on (a) the interaction among labour market adjustment processes, (b) the … unemployment responses to each shock. Our analysis permits us to distinguish between the short- and long-run effects of the shocks …

This paper explores the two common concepts of the natural rate of unemployment: (i) the stable, long-run equilibrium … rate of unemployment; and (ii) the equilibrium unemployment rate at which there is no tendency for this rate to change … towards which the equilibrium unemployment rate tends with the passage of time). Specifically, it is not a reference point in …

This paper evaluates two theories of unemployment: the natural rate theory (whereby unemployment is depicted as … fluctuating around a reasonably stable natural rate) and the chain reaction theory (which views movements in unemployment as the … unemployment not only in the short run, but in the long run as well. The reason is that, in the presence of growing exogenous …

2008-2009 crisis. This paper discusses the efficiency of this type of policy and investigates its impact on unemployment … and employment. There is some evidence that short-time compensation programs stabilize permanent employment and reduce … unemployment during downturns. All in all, it seems that short-time work programs used in the recent downturn had significant …

-run unemployment rate) and the lag structure of the employment determination, wage setting, and labour force participation decisions …This paper attempts to explain disparities among the unemployment experiences of different OECD countries in terms of … the `fragility' of the short-run unemployment equilibrium (the impact of labour market shocks on the short …

model, covering a panel of EU countries, and derives the implied long-run inflation-unemployment tradeoff. Our results …

of different job search methods, conditional unemployment benefit hikes can improve welfare when individuals are risk …

, unemployment and capital accumulation. First, we recover the partial equilibrium over-employment phenomenon put to the fore by … Stole and Zwiebel (1996a,b) at the firm level, according to which the bargaining power of workers increases employment …. Further, with heterogeneous labour, higher relative bargaining power for some groups leads quite generally to over-employment …

This paper analyzes the strikingly different response of unemployment to the Great Recession in France and Spain. Their … labor market institutions are similar and their unemployment rates just before the crisis were both around 8%. Yet, in … France, unemployment rate has increased by 2 percentage points, whereas in Spain it has shot up to 19% by the end of 2009. We …