This paper analyses the relation between US inflation and unemployment from the perspective of "frictional growth," a … has not only persistent, but permanent real effects, giving rise to a long-run inflation-unemployment tradeoff. We … the US unemployment and inflation trajectories during the nineties. …

This paper offers a reappraisal of the inflation-unemployment tradeoff, based on "frictional growth," describing the … these shocks also generate plausible impulse-responses for unemployment. Although our theory contains no money illusion, no … permanent nominal rigidities, and no departure from rational expectations, there is a long-run inflation-unemployment tradeoff. …