@techreport{NBERw14818,
 title = "Hysteresis in Unemployment: Old and New Evidence",
 author = "Laurence M. Ball",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "14818",
 year = "2009",
 month = "March",
 URL = "http://www.nber.org/papers/w14818",
 abstract = {This paper argues that hysteresis helps explain the long-run behavior of unemployment.  The natural rate of unemployment is influenced by the path of actual unemployment, and hence by shifts in aggregate demand.  I review past evidence for hysteresis effects and present new evidence for 20 developed countries. A central finding is that large increases in the natural rate are associated with disinflations, and large decreases with run-ups in inflation.  These facts are consistent with hysteresis theories and inconsistent with theories in which the natural rate is independent of aggregate demand.},
}