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September 10, 2025ShodhKosh Journal of Visual and Performing Arts

Unemployment Hysteresis in Post-Recession Economies

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Authors

BABejoy Abraham

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Overview

This analysis demonstrates how unemployment hysteresis affects the natural rate of unemployment, suggesting critical policy interventions are necessary.

Key Points

  • Unemployment hysteresis leads to lasting increases in the natural rate of unemployment, complicating recovery efforts.
  • Empirical data indicates that a 1-point actual unemployment increase can raise the natural rate by 0.16 percentage points.
  • Monetary policy significantly influences the severity of unemployment hysteresis, particularly when at the zero lower bound.
  • Effective fiscal interventions like job training and wage subsidies may mitigate the long-term impacts of high unemployment.

Cite This Study

Bejoy Abraham (2023) studied this question.

synapsesocial.com/papers/68c1e17854b1d3bfb60fef16https://doi.org/10.29121/shodhkosh.v4.i2.2023.6002
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