This paper contributes to the growing literature that attempts to explain unemployment persistence. We show that when the economy is struck by a negative transitory (or permanent) demand or supply shock, firms can find their way back quicker to the pre-shock (or new) employment levels if they...

We distinguish and assess three fundamental views of the labor market regarding the movements in unempoyment: (i) the frictionless equilibrium view; (ii) the chain reaction theory, or prolonged adjustment view; and (iii) the hysteresis view. While the frictionless view implies a clear...

This paper explores Bolivia’s current unemployment situation taking into account the reallocation of resources within the aggregate supply. The origin of this internal imbalance is due to negative impacts of external real exchange rate (RER) shocks, as well as to changes in the destination of...

We study the evolution of inflation aversion preferences across generations. In the theoretical part of the paper, we analyze the dynamics of such preferences in an overlapping-generations model with heterogenous mature agents characterized by different degrees of inflation aversion. We show how...

The Great Recession from December 2007 to June 2009 is associated with a dramatic weakening of the labor market from which the labor market is now only slowly recovering. The unemployment rate remains stubbornly high and durations of unemployment are unprecedentedly long. I use data from the...

We consider nonparametic identification of the average marginal effect of a continuous endogenous regressor in a generalized nonseparable model when the regressor of interest is a known, deterministic, but kiniked function of an observed continuous assignment variable. This design arises in many...

Job security provisions are commonly invoked to explain the high and persistent European unemployment rates. This belief has led several countries to reform their labor markets and liberalize the use of fixed-term contracts. Despite how common such contracts have become after deregulation, there...

This paper studies the notion that a rise in job insecurity, due to rising labor market uncertainty, leads to wage moderation - the ‘wage restraint hypothesis’. It begins by finding only mixed theoretical support for this hypothesis, as an increase in uncertainty generates an ambiguous...

This paper provides a simple matching model in which unemployed workers and employers can be matched together through social networks or through more ?formal? methods of search. We show that, in some case, networks substitute for labor market and that this crowding-out effect may be socially...

America Works is a splendid book and Richard Freeman is to be congratulated on producing a work that sets out what is right and what is wrong with the U.S. labor market while being a joy to read. While I am generally sympathetic to both the analysis and the conclusions, there are a number of...