Discussion paper

DP10745 Hysteresis and the European Unemployment Problem Revisited

The unemployment rate in the euro area appears to contain a
signi?ficant nonstationary component, suggesting that some shocks have permanent e¤ects 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.

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Citation

Gali, J (2015), “DP10745 Hysteresis and the European Unemployment Problem Revisited”, CEPR Press Discussion Paper No. 10745. https://cepr.org/publications/dp10745