The aim of this paper is to analyze and estimate salient characteristics of unemployment dynamics. Movements in … unemployment are viewed as "chain reactions" of responses to labor market shocks, working their way through systems of interacting … lagged adjustment processes. In the context of estimated labor market systems for Germany, the UK, and the US, we construct …

supply-variables affect unemployment in the long-run. Further we also investigate the impact of different supply and demand …-shock on long-term unemployment. Our findings suggest that there is hysteresis in both countries, and that it happens through … different channels, namely, long-term unemployment, productivity, capital stock and real long-term interest rates. These results …