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 …

reaction theory of unemployment, which focuses on (a) the interaction among labour market adjustment processes, (b) the …This Paper presents a reappraisal of unemployment movements in the European Union. Our analysis is based on the chain … interplay between these adjustment processes and the dynamic structure of labour market shocks, and (c) the interaction between …

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 … outcome of the interplay between labour market shocks and a network of lagged adjustment processes). We show that, for labour …

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

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