Diamond-Mortensen-Pissarides search theory explains why vacancies and jobless workers coexist

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NAIRU estimates have been revised downward repeatedly since the 1990s Phillips curve flattening after the 1990s broke the textbook inflation and joblessness trade-off Real business cycle models treat unemployment as voluntary intertemporal substitution of leisure What happens to lifetime earnings for a cohort that graduates into a deep recession? Keynesian reasoning holds that wage cuts can deepen a slump rather than restore full employment Matching function estimates tell you how many hires a given stock of vacancies produces Four percent unemployment in 2024 does not mean what four percent meant in 2009 Friedman's natural rate argument says pushing below it only buys inflation The classical view treats unemployment as a price problem caused by wages above equilibrium Efficiency wage theory explains why firms pay above the market and still leave queues at the door