This paper indicates that East Germany's unemployment originates primarily in the labor market, caused by the fast wage …

This paper addresses the question of why prolonged regional unemployment differentials tend to persist even after their … proximate causes have been reversed (e.g., after wages in the highunemployment regions have fallen relative to those in the low-unemployment …-productivity "trap", through the attrition of skills and work habits. We develop and calibrate a model along these lines for East Germany …

This paper addresses the question of why prolonged regional unemployment differentials tend to persist even after their … proximate causes have been reversed (e.g., after wages in the highunemployment regions have fallen relative to those in the low-unemployment …-productivity "trap", through the attrition of skills and work habits. We develop and calibrate a model along these lines for East Germany …

inflation and the stabilization of the welfare relevant output gap after a productivity shock hits the economy. When the … standard model is enhanced by real wage rigidities or labor turnover costs, an endogenous short-run inflation-output tradeoff … rigidities. Second, labor turnover costs are the dominant source for the inflation-output tradeoff when both rigidities are …

driver of the unusually small increase in German unemployment in the Great Recession. One possible explanation is that firms …

flexibility has also affected how firms adjust employment in Germany. Using a rich microeconomic dataset, we show that firms with … the key driver of the unusually small increase in German unemployment in the Great Recession. …

This paper analyzes the effects of different labor market institutions on inflation and output volatility. The eurozone …. We use a New Keynesian model with unemployment to predict the effects of different labor market institutions on … on inflation volatility, which can also be rationalized by our theoretical model. …