model labor market frictions and unemployment explicitly. This chapter describes some of the essential ingredients and …

A new approach for introducing unemployment into the New Keynesian framework. …cover -- Contents -- Series Foreword -- Preface -- Introduction -- A Simple Model of Unemployment and Inflation … Dynamics -- Unemployment, the Output Gap, and the Welfare Costs of Economic Fluctuations -- Unemployment and Monetary Policy …

We integrate social exclusion, operationalized in terms of long-term unemployment, into the theory of optimal …, in conjunction with optimal income taxation, contributes to redistribution and reduced long-term unemployment. The second … marginal cost, whereas public employment and unemployment benefits are underprovided. Our calibration shows how the policy mix …