Hysteresis and the European Unemployment Problem Revisited
NBER Working Paper No. 21430
The unemployment rate in the euro area appears to contain a significant nonstationary component, suggesting that some shocks have permanent effects on that variable. I explore possible sources of this nonstationarity through the lens of a New Keynesian model with unemployment, and assess their empirical relevance.
Document Object Identifier (DOI): 10.3386/w21430
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