labor market and skill obsolescence from long-term unemployment. The model can account for key features of the Great … aggregate demand raises unemployment and the training costs associated with skill obsolescence. Lower employment hinders … demand shock alone. These feedback channels mitigate the disinflationary effect of the demand shock while amplifying its …

labor market and skill obsolescence from long-term unemployment. The model can account for key features of the Great … aggregate demand raises unemployment and the training costs associated with skill obsolescence. Lower employment hinders … demand shock alone. These feedback channels mitigate the disinflationary effect of the demand shock while amplifying its …

-run Phillips curve between inflation and unemployment and a trade-off between price distortions and output hysteresis that change … hysteresis effects on unemployment and output. Price level targeting or a Taylor-rule responding to the unemployment rate can …

of the shock to the eurozone which is our main trade partner. …