This paper investigates the importance of labor market institutions for inflation and unemployment dynamics. Using the … Unemployment Rigidities (UR) and those that cause Real Wage Rigidities (RWR). The two types of institutions have opposite effects … and their interaction is crucial for the dynamics of inflation and unemployment. We estimate a panel VAR with …

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 …

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 …

employment and hours affecting inflation dynamics via marginal costs. We find that the response of unemployment and inflation to … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation …

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 …