The High Unemployment Trap
A model of the labor market under firing restrictions and endogenous quits is constructed. It is shown that, in the spirit of O. J. Blanchard and L. Summers (1988), the model can generate multiple equilibria for plausible parameter values, with a low quits/high unemployment equilibrium coexisting with a high quits/low unemployment equilibrium. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Volume (Year): 110 (1995)
Issue (Month): 2 (May)
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