Research aimed at explaining the greater persistence of unemployment in European countries relative to the US has found higher employment adjustment costs in Europe to be a significant contributing factor. This paper explores the potential for costly adjustment of labour to explain at least some...

There is a substantial empirical literature which examines the relationship between private and public consumption. The conclusions from this literature, however, are generally mixed. In this paper, we attempt to provide some additional evidence on this relationship. We consider a two-good...