paper, we present a model with equilibrium unemployment which has three distinctive properties. First, using a search and …, which allows the model to reproduce the fluctuations of unemployment over the business cycle. And third, the model implies a … reasonable elasticity of steady state unemployment with respect to changes in benefits. The calibration of the model implies low …

unemployment. The results suggest that the elasticity is indeed negative, i.e. that real wages are lower in local labour markets … with higher unemployment. The size of the elasticity for the euro area is similar to that found in previous studies for a … number of countries, including the United States. Furthermore, there is some variation in the unemployment elasticity by …

deviate from the strict inflation targeting since the policy maker faces a typical unemployment/inflation trade-off. In this … (hence the output gap) since the latter also depends on the evolution of unemployment. The matching frictions add a … matches. Hence optimal monetary policy features unemployment targeting along with inflation targeting. …

, this allows the model to generate fluctuations of unemployment, vacancies, and labor productivity whose magnitudes are …

-cycle-frequency fluctuations in unemployment and job vacancies, given shocks of a plausible magnitude. We use data on the cost of vacancy creation …

surrounding the effects of rule-based monetary policy on unemployment dynamics in the euro area and the US. We employ a Bayesian …

macroeconomic forecasts. We produce real time out-of-sample forecasts for inflation, the unemployment rate and the interest rate …