modern labour market literature NAIRU is defined as the rate of unemployment at which inflation stabilises in the absence of … any wage-price surprises. Conventional thinking about the equilibrium unemployment rate assumes that in the long run NAIRU … even in simple log-linear wage-price models. Furthermore we provide a survey on a number of “hysteresis-mechanisms” which …

inflation and unemployment. During an upswing, firms will take on and train new workers. These workers are, however, not shed …