Unemployment in the United Kingdom has fallen from high European-style levels to US levels. I argue that the key … monetary policy as an institutional change that reduced inflationary pressures in the face of falling unemployment. The decline …

In this paper we study 2-state Markov switching VAR models of monthly unemployment and inflation for three countries … with high or low unemployment volatility. We find that MS-VAR models seem to provide a better description of the data than … variance in unemployment. In the U.S. case we find that the variance of unemployment is lower in the low inflation regime than …