The recent financial and pandemic crises suggest that severe recessions induce lasting effects on employment rate via hysteresis mechanisms. Yet, the literature has not explored variations in hysteresis intensity among demographic groups. This paper fills this gap by employing a switching...

How firms respond to uncertainty determines economic policy effectiveness. Using Brexit as a natural experiment, I document that flexible price-setters - those most responsive to monetary policy - paradoxically reduce adjustment more than sticky firms under uncertainty. This "curse of...

"Because skilled workers entail higher hiring and firing expenses, firms tend to retain skilled workers in the face of the high labor adjustment costs (LACs). The retention of skilled workers imposes inflexibility on business operations and exposes firms to cash flow shocks. Firms with high LACs...

Business cycles with pronounced inflation can have sectoral origins and often feature a growing share of price-adjusting firms. Rationalizing such phenomena requires enhancing our modeling toolkit. We do that by building a non-linear equilibrium multi-sector framework featuring a general...