62 Pages Posted: 18 Oct 2005
Date Written: October 10, 2005
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.
Keywords: unemployment, institutions, shocks, hysteresis, labor market
JEL Classification: E24, J6
Suggested Citation: Suggested Citation
Blanchard, Olivier J., European Unemployment: The Evolution of Facts and Ideas (October 10, 2005). MIT Department of Economics Working Paper No. 05-24. Available at SSRN: https://ssrn.com/abstract=825885 or http://dx.doi.org/10.2139/ssrn.825885
By David Coe