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Understanding unemployment flows

  • Ekkehard Ernst
  • Uma Rani

This article reviews the current state of research on unemployment dynamics in macroeconomic models. In particular, it discusses the increasingly widespread use of the labour-market flow approach as implemented via a search and matching process and presents main policy considerations that arise from this approach related to unemployment benefit systems and employment protection. It reviews the implications of the labour-flow approach for dynamic properties of macroeconomic models and discusses policy implications for macroeconomic and labour-market policies. Finally, it presents new evidence on the effectiveness of policies to influence unemployment in- and outflows. Copyright 2011, Oxford University Press.

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Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 27 (2011)
Issue (Month): 2 ()
Pages: 268-294

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Handle: RePEc:oup:oxford:v:27:y:2011:i:2:p:268-294
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