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 … contractionary effect on output. The temporary growth slowdown translates into output hysteresis (permanently lower output and labor …

of weak demand can lead to rising structural unemployment and a permanently lower capital stock – the hysteresis effects …) policies to cope with hysteretic unemployment is neither necessary nor sufficient. Instead, subtler forms of hysteresis should … Blanchard and Summers type of hysteresis approach should not be taken one-to-one into recommendations for monetary policy …

, inflation and unemployment, we detect a wrong sign in the response of inflation to contractionary monetary policy shocks … significant unemployment inflation trade-off emerges. These conclusions are confirmed by using industrial production instead of … the unemployment rate in the VAR model. …

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 …

This paper estimates NAIRU (Non-Accelerating Inflation Rate of Unemployment) for the Turkish economy as an unobserved … unemployment gap, the systems approach imposes stochastic laws of motion for NAIRU and potential output and also assumes the … moves in tandem with the actual unemployment, but it follows a more volatile path than the latter. Accordingly, the …

in their unemployment rate and not a decline in labour force participation rate. Policymakers should take account of …

lose skill and are expensive to retrain, generating multiple steady state unemployment rates. Large temporary shocks push …, reducing hiring and catapulting the economy toward the high-unemployment steady state. Even after a short-lived liquidity trap …, the economy recovers slowly at best; at worst, it falls into a permanent unemployment trap. Because monetary policy may be …

an unemployment cost equivalent to 0.8 percentage points over the sample period where the average unemployment rate …