LECHTHALER, WOLFGANG; TESFASELASSIE, MEWAEL F. - In: Journal of Money, Credit and Banking 55 (2022) 8, pp. 2187-2213
We embed skill obsolescence and endogenous growth into a New Keynesian model with search‐and‐matching frictions. The model accounts for key features of the Great Recession: the “productivity puzzle” and the “missing disinflation puzzle.” Lower aggregate demand raises long‐term...