We develop a utility based model of fluctuations, with nominal rigidities, and unemployment. In doing so, we combine …-Mortensen-Pissarides model, with its focus on labor market frictions and unemployment. In developing this model, we proceed in two steps. We … effect on unemployment in the constrained e?cient allocation. We then focus on the implications of alternative real wage …

covering the development on an aggregate level. Estimations to shed light on the relation between unemployment and labour force … years. However, the impact of this development on unemployment is rather limited. …

. Empirical results concerning Europe and selected other industrial countries reveal that the cyclical link between unemployment …