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We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and balanced budget rules cause a complementarity between capital and employment capable of explaining the existence of multiple equilibrium paths. Hysteresis is viewed as the result...
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more flexible. However, the problem may also lie with the demand for labour. Taking into account the fact that investment … rates in the EU have declined over the last decade, a focused attempt to stimulate labour demand through investment should … also be considered. The relationship between investment and employment creation raises two key questions. First, how much …
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Economic policy makers, international organisations and private-sector forecasters commonly use short-term forecasts of real GDP growth based on monthly indicators, such as industrial production, retail sales and confidence surveys. An assessment of the reliability of such tools and of the...
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