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We provide a Keynesian growth theory in which pessimistic expectations can lead to very persistent, or even permanent …, slumps characterized by unemployment and weak growth. We refer to these episodes as stagnation traps, because they consist in …
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This paper analyses how labour market heterogeneity affects unemployment, productivity and business cycle dynamics that … skilled workers increases the natural rate of unemployment and reduces total factor productivity with long- run effects on the … Beveridge curves. Skill-specific labour market heterogeneity leads to a attening of the Phillips curve as wages and unemployment …
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We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and …
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