The deep deterioration in the labor market during the Great Recession, the subsequent slow recovery,and the missing disinflation are hard to reconcile for standard macroeconomic models. We develop andestimate a New-Keynesian model with financial frictions, search and matching frictions in the labormarket, and endogenous intensive and extensive labor supply decisions. We conclude that the estimatedcombination of the low degree of nominal wage rigidities and high degree of real wage rigidities, togetherwith the small role of pre-match costs relative to post-match costs, are key in successfully forecastingthe slow recovery in unemployment and the missing disinflation in the aftermath of the Great Recession.