where aggregate shocks have a permanent effect on the unemployment rate. If agents' wealth decreases, the unemployment rate … increases for a potentially indefinite period. This makes unemployment rate dynamics path dependent as in Blanchard and Summers … (1987). I argue that this feature explains the persistence of the unemployment rate in the U.S. after the Great Recession …

Okun's law is formulated as the ratio between GDP and unemployment (UE): β = f(GDP/UE). It is used to investigate the …

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 …

unemployment is very close to zero when unemployment is above its long term average but large and highly significant when below. We … unemployment. It cannot however match the persistence of the German unemployment rate. We conjecture that extending the model to …