that a shock to the net flow from unemployment to employment drive the unemployment rate and the participation rate in … performance. Our analysis has two special features. First, apart from the two labour market states - employment and unemployment … opposite directions while a shock to the net flow from not in the labour force to unemployment drives the rates in the same …

In modern economies, sharp increases in unemployment from major adverse shocks result in long periods of abnormal … unemployment and low output. This chapter investigates the processes that account for these persistent slumps. The data are from … framework starts by discerning driving forces set in motion by the initial shock. These are higher discounts applied by decision …

We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage … cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first … cyclicality from bargaining dampens unemployment dynamics through the standard mechanism. Third, our calibrated model suggests 46 …