In Spring 1991, we argued that the centrepiece of German policy towards unification should be a universal, temporary wage subsidy in Eastern Germany and the elimination of all other subsidies. Subsequent events have strengthened the analytical case for and practical importance of this policy....

Over recent years `opportunity cost' (OC) models of growth have been constructed which suggest that firms take advantage of the possibility of intertemporal subsitution in order to engage in productivity-improving activities during recessions. This paper tests whether this argument is correct,...

Standard economic reasoning based on competitive labour markets suggests that migrant inflow will unambiguously lead to allocative gains for the native population of a host country. Even abstracting from the costs of integration, however, this result is not robust when important labour market...

The non-stationarity of many macroeconomic time series has lead to an increased demand for economic models that are able to generate fragile equilibria. For instance, in this literature the natural unemployment rate is allowed to shift over time depending on past unemployment. Actually, many...

We use a small macro model of the Indian economy to examine the cost of the adjustment required to secure national solvency. This is compared with the corresponding cost if India were to repudiate its debts and experience financial autarky as a consequence. Our empirical results suggest that a...

Stylized empirical facts on the behaviour of exchange rates and interest rate differentials in target zone arrangements are at odds with the predictions of the simple (fully credible) target zone model. Incorporating time-varying devaluation risk in target zone models enriches the...

Data on output and prices for eleven EC member nations are analysed using a VAR decomposition to extract information on underlying aggregate supply and demand disturbances. The coherence of the underlying shocks across countries and the speed of adjustment to these shocks are compared with the...

We study the design of a sequence of two contests between a pair of identical risk averse employees whose effort choices are private information. It is optimal for the organization to `bias' the second contest in favor of the early winner - the reduction in second-period incentives is outweighed...

The commonly accepted chronology for comparative productivity levels based on GDP data does not apply to the manufacturing sector, where there is evidence of a much greater degree of stationarity of comparative labour productivity performance among the major industrialized countries of Germany,...

This paper gives a historical dimension to the impact of trade unions on earnings by estimating the union wage effect in Britain between 1889-90 using data from the US Commissioner of Labour survey conducted at that time. The determinants of union status are also investigated in terms of profit...