This paper explicitly differentiates between unemployment and inactivity, by defining inactivity as a state in which … of large flows between employment, unemployment and inactivity. Secondly, it shows that unemployment and aggregate wages … individuals do not search for jobs when non-employed. Facing changes in the value of inactivity, individuals transit through three …

little employment protection and low unemployment benefits, while the European model (generous benefits and higher duration …

Unemployment may depend on equilibrium in other markets than the labor markets. This paper adresses this old idea by … effect of financial frictions on equilibrium unemployment is amplified by goods market frictions and vice versa. …