In the aftermath of the financial crisis of 2007 - 2008 (and the resulting Great Recession) policymakers became concerned about a potential long-term effect of the crisis on the wider economy. For instance, in an ECFIN Economic Brief titled "The financial crisis and potential growth: Policy...

Over the last decades, hours worked per capita have declined substantially in many OECD economies. Using a neoclassical growth model with endogenous work-leisure choice, we assess the role of trend growth slowdown in accounting for the decline in hours worked. In the model, a permanent reduction...

We analyze the effects of government spending in a New-Keynesian model with search and matching frictions featuring endogenous growth through learning-by-doing and skill loss from long-term unemployment. We show that medium-run and long-run output and unemployment multipliers are much larger...

In the current monetary policy framework, the ECB (as most central banks) set a target for the annual inflation rate as a nominal anchor to maintain price stability. The ECB inflation rate is defined as the year-on-year percentage change of the harmonised index of consumer prices. Nominal GDP...