European Unemployment: The Evolution of Facts and Ideas
Olivier J. Blanchard
National Bureau of Economic Research (NBER); Peter G. Peterson Institute for International Economics
October 10, 2005
MIT Department of Economics Working Paper No. 05-24
In the 1970s, European unemployment started increasing. It increased further in the 1980s, to reach a plateau in the 1990s. It is still high today, although the average unemployment rate hides a high degree of heterogeneity across countries. The focus of researchers and policy makers was initially on the role of shocks. As unemployment remained high, the focus has progressively shifted to institutions. This paper reviews the interaction of facts and theories, and gives a tentative assessment of what we know and what we still do not know.
Number of Pages in PDF File: 62
Keywords: unemployment, institutions, shocks, hysteresis, labor market
JEL Classification: E24, J6
Date posted: October 18, 2005
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