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frictionless equilibrium view; (ii) the chain reaction theory, or prolonged adjustment view; and (iii) the hysteresis view. While …
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these shocks also generate plausible impulse-responses for unemployment. Although our theory contains no money illusion, no …
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This paper provides a critique of the "unemployment invariance hypothesis", according to which the behavior of the labor market ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity and the labor force. Using Solow growth and endogenous growth...
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