There is substantial racial and gender disparity in the American economy. As we will demonstrate, discriminatory treatment within the labor market is a major cause of this inequality. Yet, there appear to have been particular periods in which racial minorities, and then women, experienced...

In a conventional macroeconomic model, following a policy change, as nominal wages adjust the economy returns to its original real levels of employment, output, and unemployment. This description of events ignores the social psychological consequences of exposure to unemployment. On theoretical...