We develop a utility based model of fluctuations, with nominal rigidities, and unemployment. In doing so, we combine …-Mortensen-Pissarides model, with its focus on labor market frictions and unemployment. In developing this model, we proceed in two steps. We … effect on unemployment in the constrained efficient allocation. We then focus on the implications of alternative real wage …

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 …

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 …

particular, it provides a natural interpretation for the dynamic inflation--unemployment relation found in the data …

model labor market frictions and unemployment explicitly. This chapter describes some of the essential ingredients and …