Indivisibilities in extending financial markets imply level shifts in the financial cost share. This could induce growth and savings slumps. We search for structural breaks in the financial sector share of seven OECD countries and relate these to changes in GDP growth and the savings share. The...

The authors formulate a stochastic infinite-horizon insider-outsider model that is solved explicitly and used to investigate the consequences of alternative 'seniority' rules for wage and employment determination. The model is simple enough to allow analysis of several different institutional...

While the consequences of nominal wage contracts have been rather thoroughly analyzed, there is no generally accepted theory of why such contracts prevail. In this paper, the author argues that the distinction between insiders and outsiders is important for understanding nominal wage contracts....