Data Management

Involuntary Unemployment And The Business Cycle

Free registration required

Executive Summary

The authors propose a monetary model in which the unemployed satisfy the official US definition of unemployment: they are people without jobs who are currently making concrete efforts to find work and willing and able to work. In addition, the model has the property that people searching for jobs are better off if they find a job than if they do not (i.e., unemployment is 'Involuntary'). They integrate the model of involuntary unemployment into the simple New Keynesian framework with no capital and use the resulting model to discuss the concept of the 'Non-accelerating inflation rate of unemployment'.

  • Format: PDF
  • Size: 1240.5 KB