In this paper we analyse a new Phillips curve (NPC) model and demonstrate that (i) frictional growth, i.e. the interplay of wage-staggering and money growth, generates a nonvertical NPC in the long-run, and (ii) the Phillips curve (PC) shifts with productivity growth. On this basis we estimate a...

Central bankers are raising interest rates on the assumption that wage-push inflation may lead to stagflation. This is not the case. Although unemployment is low, the labor market is not 'tight'. On the contrary, we show that what matters for wage growth are the non-employment rate and the...

Adopting a simple Phillips curve framework, we show that different labour market institutions across EU countries are associated with significant differences in the response of inflation to unemployment and exchange rate shocks. More wage coordination and higher union density flatten the...

This paper evaluates the success of Inflation Targeting on inflation and growth on a large panel data set of both developing and developed countries. Earlier studies have found contradictory results depending on the methodology used, different authors have used different estimation methods on...

Two extraordinary U.S. labor market developments facilitated the sharp disinflation in 2022-23 without raising the unemployment rate. First, pandemic-driven infection worries and social distancing intentions caused a sizable drag on labor force participation that began to reverse in the first...

We present a model of the time-allocation decision of spouses in order to study the role of heterogeneity in preferences and wages for couples' labor supply. Spouses differ in their tastes for market consumption and non-market goods and activities, and also in their offered or earned wages. They...

Building a model with three imperfect markets - goods, labor and credit - representing a product's life-cycle, we find that goods market frictions drastically change the qualitative and quantitative dynamics of labor market variables. The calibrated model leads to a significant reduction in the...

This essay aims to discuss the conditions for a successful implementation of the European Youth Guarantee in Italy. In principle, the program should be able to affect the frictional and mismatch components of unemployment, if not the Keynesian and neoclassical ones, as also the experience of...

This paper analyses the relation between US inflation and unemployment from the perspective of "frictional growth," a phenomenon arising from the interplay between growth and frictions. In particular, we examine the interaction between money growth (on the one hand) and various real and nominal...