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We develop a theory of endogenous and stochastic fluctuations in economic activity. Individual firms choose to randomize over firing or keeping workers who performed poorly in the past to give them an ex-ante incentive to exert effort. Different firms choose to correlate the outcome of their...
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between the inflation rate and the unemployment rate is extremely important. This tradeoff has become known as the Phillips … statistical technique that solves the omitted variables problem, to estimate the tradeoff between inflation and unemployment for … international context for the vast majority of the countries studied is affecting the inflation versus unemployment tradeoff. …
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