New-Keynesian macroeconomic models typically assume that any long-run trade-off between inflation and unemployment is ruled out. While this appears to be a reasonable characterization of the US economy, it is less clear that the natural rate hypothesis necessarily holds in a European country...

Persistently high unemployment rates in Germany have led to a long-running controversy on the causes of the unemployment problem. This paper aims to re­view the contribution of Keynesian and monetarist theories to this controversy and explores empirically their implications for the explanation...

Using a money-in-the-utility-function model, we present long-run stagnation where insatiable demand for money secularly causes deficient aggregate demand and thereby unemployment in the presence of nominal wage stickiness attributable to union wage setting. In this long-run stagnation, generous...