analytically. Under certain conditions the model exhibits hysteresis, i.e. temporary shocks on the price level or the unemployment …

less-affected areas. Population also falls, primarily due to reduced in-migration, but by less than employment. As a result …, recessions generate long-lasting hysteresis: persistent decreases in the employment-to-population ratio and earnings per capita …. Changes in the composition of workers explain less than half of local hysteresis. We further show that finite sample bias in …