This paper offers a reappraisal of the inflation-unemployment tradeoff, based on "frictional growth", describing the … these shocks also generate plausible impulse-responses for unemployment. Although our theory contains no money illusion, no … permanent nominal rigidities, and no departure from rational expectations, there is a long-run inflation-unemployment tradeoff …

raising unemployment benefits in a model with endogenous job destruction and skill mismatch leads to a longer expected … duration of post-unemployment job matches. On the other hand, an increase in skill mismatch in the aggregate production … function lowers the level of unemployment in an economy with high unemployment benefits. The third chapter empirically …