What explains the persistence of unemployment? The literature on hysteresis, which is based on unit root testing in … autoregressive models, consists of a vast number of univariate studies, i.e. that analyze unemployment series in isolation, but few … multivariate analyses that focus on the sources of hysteresis. As a result, this question remains largely unanswered. This paper …

models can generate both substantial inflation persistence and a nonzero inflation-unemployment tradeoff in the long … - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … puzzle is highly misleading, relying on the exogeneity of the forcing variable (e.g. output gap, marginal costs, unemployment …

-price staggering models can generate both substantial inflation persistence and a nonzero inflation-unemployment tradeoff in the long …" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly …, unemployment rate) and the assumption of a zero discount rate. We show that when the discount rate is positive in a general …

-price staggering models can generate both substantial inflation persistence and a nonzero inflation-unemployment tradeoff in the long …" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly …, unemployment rate) and the assumption of a zero discount rate. We show that when the discount rate is positive in a general …

In this paper, we identify demand shocks that can have a permanent effect on output through hysteresis effects. We call … employment and investment, although output per worker is largely unaffected. We find strong evidence that hysteresis transmits … through a rise in long-term unemployment and a decline in labor force participation and disproportionately affects the least …

We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and … equilibrium paths. Hysteresis is viewed as the result of a selection between these different equilibrium paths. We use this model … of the 1970?s may have played a central role in generating hysteresis. …

We analyse the determinants of unemployment persistence in four OECDcountries byestimating a structural Bayesian VAR … with an informative priorbased on an insiders/outsiders model. We explicitly insert unemployment ben-efits and labour taxes … so that our identification is not affected by the Faust andLeeper (1997) critique. We find widespread hysteresis: demand …

This paper provides a model of "social hysteresis" whereby long, deep recessions demotivate workers and thereby lead …