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Unemployment hysteresis and capacity

Abstract:

This paper examines an open economy model in which equilibrium unemployment depends on capacity in the traded-goods sector. The model is estimated using U.K. quarterly data and compared with alternative concepts of equilibrium unemployment based on labour market variables (as in Layard and Nickell, 1986) or on the price of oil and the real interest rate (as in Carruth, Hooker and Oswald, 1998). The capacity model displays a non-linear hysteresis mechanism through which capacity utilisation an...

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Publication status:
Published

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Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2001-10-01
Paper number:
82
Keywords:
Pubs id:
1144338
Local pid:
pubs:1144338
Deposit date:
2020-12-15

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