... become discouraged and diminish their job search intensity, lowering their probability of finding employment (seeDevine and Kiefer, 1991; Schmitt and Wadsworth, 1993). Another strand of the literaturefocuses ... Pekkarinen (2001) for Finland, Blackaby and Hunt (1992) for the UK, and Winter-Ebmer (1996) for Austria). These studies find a positive relationship betweenlong-term unemployment and wages.3 Econometric ... (L) Xt+ εt(1)where πt and πetdenote realized and expected inflation, β (L), γ (L) ,and (L) are polynomialsin the lag operator, uNtis the NAIRU at time t,andXtis a vector of possible...