The Permanent Income Hypothesis (PIH) predicts an income innovation has the same size effect on consumption as on permanent income, an implication we examine with a cross-country test proposed by Kormendi & LaHaye (1984). The data from industrial countries support PIH but data from developing...

This paper presents a new interpretation of the Phillips curve that rests on the process of nominal wage adjustment in a multi-sector economy. Nominal demand growth causes inflation in sectors with full employment, but it speeds up the process of employment creation in sectors with unemployment....

This article explores the relationship between public investment and growth among 56 low and middle income nations during the 1980s. The theoretical grwoth iterature emphasizes that initial increments of public capital raise growth but, at some point, additional increments of public capital...

Does dismissal protection stabilise employment contracts? This study analyses whether the different dismissal laws in the EU countries have an impact on employment stablitiy or, to put it the other way around, whether worker mobility is higher in less regulated labour markets. The paper first...

The UK entered the ERM in October 1990 in search of an alternative policy framework and nominal discipline to monetary targets, but entry was dominated by short term considerations and the constraints implied by membership were not properly understood. The UK left the ERM in September 1992 after...